Preamble

The House met at a Quarter before Three of the Clock,Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

MINISTRY OF HEALTH PROVISIONAL ORDER (TORQUAY) BILL,

" to confirm a Provisional Order of the Minister of Health relating to the borough of Torquay," presented by Sir Hilton Young; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 62.]

NEW WRIT.

For the County of Kent (Ashford Division), in the room of Captain the hon. Michael Herbert Randolf Knatchbull, M.O., now Lord Brabourne, called up to the House of Peers.—[Sir Frederick Thomson.]

Oral Answers to Questions — TRADE AND COMMERCE.

PORTUGUESE PORTS (FLAG DISCRIMINATION).

Mr. LOUIS SMITH: 3.
asked the Secretary of State for Foreign Affairs if he can expedite the settlement of the negotiations with Portugal respecting the discriminatory rates on British goods to Portugal in favour of vessels flying the Portuguese flag, and more especially because its continuance is hampering the development of trade between the two countries?

The SECRETARY of STATE for FOREIGN AFFAIRS (Sir John Simon): Every effort is being made by His Majesty's Government in the United Kingdom to bring these negotiations to a satisfactory conclusion. The prejudicial effect of flag discrimination upon Anglo-Portuguese trade is fully appreciated by His Majesty's Government.

IMPERIAL PREFERENCE (COTTON GOODS).

Mr. RANKIN: 14.
asked the Secretary of State for the Colonies whether any special efforts and, if so, of what nature are now being made to secure increased preference for cotton goods within the Empire?

The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister): I would refer my hon. Friend to the answer given by my hon. Friend the right hon. the Secretary of State for Dominion Affairs yesterday to the same question.

RUSSIA.

Sir BASIL PETO: 36.
asked the President of the Board of Trade the total balance of trade between this country and the Soviet Republic during the past 11 years and also the corresponding figure for trade between the United States of America and the Soviet Republic; and whether, in making any fresh trade agreement, the Government will limit our purchases from the Soviet Government selling agency to an amount which will correspond with their purchases of goods produced in this country?

Lieut. - Colonel JOHN COLVILLE (Secretary, Overseas Trade Department): During the 11 years, 1922 to 1932, there was an excess of imports over exports of merchandise in the trade of the United Kingdom with the Soviet Union to the value of £136,500,000. In the case of the United States, exports to the Soviet Union during the same period exceeded in value imports from that country by about 619,000,000 dollars. It is the aim of His Majesty's Government in the negotiations now in progress to secure an improvement in the balance of trade.

Sir B. PETO: Can the hon. and gallant Gentleman say whether the figures he gave of trade between the United Kingdom and the Soviet Republic included re-exports, or did they relate only to the products of this country exchanged for the products of the Soviet?

Lieut.-Colonel COLVILLE: The figures are actually merchandise sent.

Sir B. PETO: Then they would include re-exports7 What are the figures for re-exports?

Lieut.-Colonel COLVILLE: I could not say without notice.

Sir HERBERT SAMUEL: 37.
asked the President of the Board of Trade if he will state on what date the notice given by the Government to terminate the present Anglo-Russian trade agreement expires; and what progress has been made in the negotiations for a new agreement?

Lieut.-Colonel COLVILLE: The present agreement will cease to be in force from the 17th April, 1933. Negotiations are continuing, but the right hon. Gentleman will not expect me to discuss the course of the negotiations while they are proceeding.

GLOVE INDUSTRY.

Sir B. PETO: 39.
asked the President of the Board of Trade whether he can give any date by which an order may be expected, in accordance with the recommendations of the Import Duties Advisory Committee, on the application of the fabric glove industry; whether the commercial negotiations with foreign countries, which are delaying the decision, relate to the glove industry or other industries; and whether, in view of the depression in the fabric glove industry in this country, due to the dumping of surplus foreign produce at prices below cost of production, he will arrive at a decision at the earliest possible moment?

Lieut.-Colonel COLVILLE: I cannot give a date by which a decision will be reached on the Committee's recommendations but the hon. Member may rest assured that there will be no unnecessary delay. As regards the second part of the question, it would not be expedient to make detailed announcements as to the scope of negotiations while they are in progress.

Sir B. PETO: Owing to the unsatisfactory nature of the reply, I beg to give notice that I shall raise the question on the Adjournment.

GREEK GUARANTEED LOAN.

Sir NICHOLAS GRATTAN-DOYLE: 4.
asked the Secretary of State for Foreign Affairs if he will explain the steps he is taking to recover the £512,187 4s. 9d. due from the Greek Government to Great Britain in respect of an old guarantee by the British Government; and whether he has brought the matter before those experts of the League of Nations who
advised upon the recent Greek loans issued under the supervision of the League of Nations?

Sir J. SIMON: By a convention concluded in 1860 between the Greek Government and the Governments which had guaranteed the loan of 1832 the Greek Government are liable to pay £12,000 annually to His Majesty's Government to be applied in reduction of the capital sum outstanding. The instalment due on the 31st December, 1932, has not yet been received and correspondence is taking place with the Greek Government with regard thereto. The answer to the second part of the question is in the. negative.

Sir N. GRATTAN-DOYLE: Since" this question has been outstanding for such a long time will my right hon. Friend give me an assurance that all possible steps are being taken to hasten a conclusion?

Mr. HANNON: Can my right hon. Friend tell the House that he hopes that the whole loan will be discharged?

Sir J. SIMON: As regards the last question I cannot answer it. I have not examined the exact terms of the loan. The only instalment, I think, which has not been paid is this last one. My hon. Friends may be assured that the Treasury of this country is taking active steps to make representations to the authorities concerned in this matter.

FIGHTING SERVICES (FISH SUPPLIES).

Mr. BURNETT: 6.
asked the First Lord of the Admiralty whether he will issue instructions to the accountant officers in ships, etc., victualled on the general mess system, for the purchase of a reasonable quantity of British-caught fish?

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Lord Stanley): Accountant officers of ships victualled on the general mess system are instructed to introduce as much variety into the dietary as possible, and fish appears frequently in the daily menus. The fish are bought on the open market, and in home waters there is no reason to suppose that they are other than British caught. As accountant officers of general
mess ships are limited in their expenditure to a fixed daily allowance per man, it would not be expedient to introduce any rule of the kind suggested by the hon. Member.

Mr. BURNETT: Will the Noble Lord, as far as possible, impress upon those concerned the importance of the fishing industry to the nation and the nutritious quality of a fish diet?

43. Mr. BURNETT: asked the Financial Secretary to the War Office whether, in the next tenders for Army rations, quotations will he invited for British-caught fish?

The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Duff Cooper): No, Sir. I am not prepared to substitute fish for meat in the soldier's standard ration. Fish is purchased by units out of the messing cash allowance which is issued with the object of enabling the messing authorities to provide a varied diet.

Mr. BOOTHBY: Why is not the hon. Gentleman prepared to include fish?

Mr. COOPER: I do not think that it would be popular to replace meat by fish as a standard ration.

MALAYA.

Mr. HICKS: 7.
asked the Secretary of State for the Colonies whether he has ascertained from the Governor of the Straits Settlements and the High Commissioner of the Federated Malay States whether there is any obstacle against the putting into force of the Workmen's Compensation Act in both Colonies; and whether he can state when the administrative orders will be applied?

Sir P. CUNLIFFE-LISTER: I consulted the Governor by despatch after the hon. Member put his question to me on 20th December last. There has not yet been time for me to receive the Governor's reply.

Mr. HICKS: Will the right hon. Gentleman pursue this matter; and can he indicate when I may repeat this question with the hope of getting an answer?

Sir P. CUNLIFFE-LISTER: I can give an answer to the hon. Member when I have received the reply from the Governor.

8. Mr. HICKS: asked the Secretary of State for the Colonies whether he can give the names of the selection board for the cadet services of Malaya; what qualifications are demanded of candidates; and whether there is any racial discrimination?

Sir P. CUNLIFFE-LISTER: The Malayan Civil Service is now part of the Colonial Administrative Service, and its personnel will in future be selected under the general system in force for that service. Selection is entrusted to the Colonial Appointments Board.

The members are:

His Majesty's Civil Service Commissioners for the time being;
Sir Horace A. Byatt;
Sir Walter Buchanan-Riddell;
Mr. Charles Goldschmidt:
Captain Philip Lonsdale; and
Mr. C. W. B. Prescott.

The Chairman is the First Civil Service Commissioner (Sir Roderick Meiklejohn). I may add that it is my intention to add to the board an experienced retired officer of the Eastern Cadet Service. Owing to the many-sided nature of the work of the Colonial Administrative Service, no rigid qualifications, other than age, are of deliberate purpose, set down. The established rule, so far as concerns personnel recruited in this country for the Colonial Administrative Service, is that "Candidates must be natural-born British subjects of pure European descent on both sides." There are, however, facilities in the Colonies themselves for the appointment of locally-recruited personnel to the service.

Mr. HICKS: 9.
asked the Secretary of State for the Colonies whether he is aware that recruitment of the Civil Service cadets of the Federated Malay States is by selection rather than by competitive examination; and what steps he is taking to put this recruitment on a competitive basis?

Sir P. CUNLIFFE-LISTER: The reasons for my decision that recruitment for the Malayan Civil Service should in future be carried out by the selection system instead of by the competitive
examination previously in force were given in my reply to the hon. Member's question on 20th December, 1932. I have no intention whatever of returning to the system of competitive examination.

KENYA GOLDFIELD.

Mr. HOLDSWORTH: 10.
asked the Secretary of State for the Colonies whether it is proposed to restore to the native councils of the Kenya Colony Reserves the right of consultation provided for in the original Ordinance before any particular piece of land is leased?

Sir P. CUNLIFFE-LISTER: No, Sir. As I explained in the Debate, the Native Council of the North Kavirondo Reserve consists of 64 members drawn from all parts of the Reserve and is clearly an inappropriate body for the purpose mentioned. The expression of native views in regard to the proposed excision, for leasing purposes, of any particular piece of land, is fully provided for by the statutory reference to the local land board, which will include for this purpose representatives of the location or section concerned, in addition to the permanent African member chosen from the local native council.

Mr. HOLDSWORTH: 11.
asked the Secretary of State for the Colonies whether all rents accruing from any lease of lands for gold winning are to be credited to the native councils of Kenya Colony?

Sir P. CUNLIFFE-LISTER: No, Sir. Any land leased for mining will first be excluded from the Reserve in exchange either for alternative land or for a monetary payment to the local native council of the full capital value thereof.

Mr. GRAHAM WHITE: 12.
asked the Secretary of State for the Colonies whether, seeing that any land in the native Reserves in Kenya Colony which is not required for gold winning is to be restored to the natives, any provision is included in the lease for repairing any surface disturbance which has taken place on land formerly leased?

Sir P. CUNLIFFE-LISTER: No, Sir. As full compensation for the land will have already been made to the natives,
I do not think it would be reasonable to impose this additional obligation on the lessee.

Mr. WHITE: 13.
asked the Secretary of State for the Colonies whether, seeing that large numbers of natives are to be employed in gold winning in Kenya Colony, it is his intention to instruct the Governor to prepare legislation providing for compensation for accidents and those diseases which usually accompany the work of winning gold?

Sir P. CUNLIFFE-LISTER: Statutory provision for compensation to natives in respect of death or serious injuries arising from mining accidents already exists in the Kenya Mining Ordinance of 1931. The Governor of Kenya has also under consideration a Workmen's Compensation Bill covering occupational diseases as well as the results of accidents.

PALESTINE (JEWISH WATCHMAN'S DEATH).

Colonel WEDGWOOD: 15.
asked the Secretary of State for the Colonies whether he has any information as to the killing of Joseph Benjamini, an ex-soldier of the British Army, in a raid by Bedouins against a Jewish settlement on this side of Jordan; and why the British police or the Transjordan force did not prevent the raid or protect the raided?

Sir P. CUNLIFFE-LISTER: 4s the answer is a long one I will, with the right hon. and gallant Gentleman's permission, circulate it in the OFFICIAL REPORT.

Colonel WEDGWOOD: May I ask whether the district commissioners are in charge of the police in their respective areas; and whether Mr. Samuel has been made a district commissioner?

Sir P. CUNLIFFE-LISTER: I take a great interest in every detail of Colonial administration, but I could not be expected to answer those questions offhand.

Colonel WEDGWOOD: The right hon. Gentleman will realise, I hope, that the post of district commissioner is infinitely more important, if the commissioners have charge of law and order in their districts.

Following is the answer:

The telegraphic report on this incident which I have received from the High Commissioner is as follows:

There was no raid by Bedouin on the Wady Hawareth. A party of police, consisting of one British non-commissioned officer and three British constables under the Assistant District Superintendent of Police, Tulkarem, acting on orders of court, evicted a. number of Arabs occupying 50 tents who were trespassing on Jewish property near Nathaniyza, on the coast west of Tulkarem. The Arabs refused to leave voluntarily, claiming that they had no land to which to go. Forcible measures were taken, and the Arabs and their possessions were placed on the road between Nathaniyza. and Ummkhalid. Some of the Arabs then asked permission to remove themselves to a neighbouring property owned by an Arab, who offered no objection, and the police gave permission. On their way to the Arab property this small party entered the land of a settlement of Jewish ex-soldiers. The deceased person, who was a Jewish watchman, spoke to the Arabs and the British corporal asked him to allow the Arabs to proceed, since, otherwise, the party, with their effects carried by hand, would be obliged to make a detour of more than two kilometres. The land of the settlement is not at this point cultivated. The British corporal then rejoined the main body on the road, 100 to 300 yards distant. Within the space of a few minutes the police engaged in moving the main body heard cries of "murder" from the land of the settlement, to which they immediately went. The Jewish watchman was on the ground. On being helped to rise, he pointed to an Arab who, he said, had struck him with a stick. Apart from a group of Arabs, there was no satisfactory eyewitness of the incident. The Jewish watchman died the same night about five hours after the assault. Three arrests have been made. The High Commissioner added that he was not yet in a position to offer observations. These will follow by despatch.

Oral Answers to Questions — AVIATION.

LANDING GROUNDS.

Mr. McENTEE: 17.
asked the Under-Secretary of State for Air if he will fur
nish a list of landing-grounds available for aeroplanes in Britain; the number that have been opened with assistance from the State; and whether any of the landing-grounds of the Royal Air Force are available for use by private aeroplanes, and the charge?

Sir FREDERICK THOMSON (Treasurer of the Household): I have been asked to reply. As the answer is long I will, with the hon. Member's permission circulate it in the OFFICIAL REPORT.

Following is the answer:

As regards the first and last parts of the question, on 31st January last there were 377 licensed civil aerodromes of all kinds in Great Britain and Northern Ireland. It should be borne in mind, however, that the majority of these were only licensed for short periods for pleasure flying. I would refer the hon. Member to the "Air Pilot," Volume 1, published by His Majesty's Stationery Office, for particulars of those in regular use and also for particulars, including charges, of some 50 Royal Air Force aerodromes, which are available in emergency for use by civil aircraft. In addition, there is a certain number of privately-owned and unlicensed landing-grounds. As regards the second part of the question, five aerodromes and landing-grounds available for public use are owned and maintained by the State, and I understand that grants from the Unemployment Grants Committee have been made in resepect of eight municipal aerodromes. Assistance has also been given indirectly towards the establishment of aerodromes through the grants to Light Aeroplane Clubs.

IRISH FREE STATE.

Sir N. GRATTAN-DOYLE: 18.
asked the Under-Secretary of State for Air whether he is aware that there is no direct communication between Great Britain and the Irish Free State by air; and whether he will consult with the appropriate authorities of the Irish. Free State to remedy this inconvenience, which is a matter of concern to many people in this country?

Sir F. THOMSON: The answer to the first part of the question is in the affirmative. As regards the second part, the
establishment of an air service between Great Britain and the Irish Free State would be a matter for private enterprise and in these circumstances, though my Noble Friend is in full sympathy with the object in view, he does not consider there would be any advantage in consultation with His Majesty's Government in the Irish Free State.

Sir N. GRATTAN-DOYLE: Is the hon. Gentleman aware that anyone who wishes to proceed from Great Britain to Southern Ireland at the present time by air, finds it necessary to charter a special aeroplane to Dublin and then proceed from Dublin to his destination in Southern Ireland?

Sir F. THOMSON: I see the hon. Member's point quite clearly but, as I have stated, this would be a matter for private enterprise.

Oral Answers to Questions — TRANSPORT.

OMNIBUS SERVICE, GLASGOW.

Mr. McGOVERN: 19.
asked the Minister of Transport if, in view of the fact that the Glasgow Corporation has refused to put omnibuses on the Glasgow-Tollcross route and that a large number of persons are deprived of this means of transport, he will withdraw the prohibition on the Glasgow Omnibus Company to lift and lay passengers in the Tollcross area?

The MINISTER of TRANSPORT (Mr. Oliver Stanley): I have no jurisdiction over the conditions attached to a road service licence unless an appeal is made to me against a decision of the Traffic Commissioners, by a person entitled to do so, within one month of the date of the decision in question. I cannot trace the receipt of any appeal relating to this matter.

Mr. McGOVERN: Is the hon. Gentleman aware that in this area people have to walk nearly half-a-mile from a large housing estate to get means of transport to and from Glasgow; and, if he has no jurisdiction in the matter, to whom am I entitled to put questions about it?

Mr. STANLEY: As my answer has indicated, if there is opposition on the part of the people in the neighbourhood, an appeal can be made against the
decision of the Traffic Commissioner. I will gladly make further inquiries into the matter for the hon. Gentleman.

RAIL AND ROAD CONFERENCE (REPORT).

Mr. H EPWORTH: 20.
asked the Minister of Transport whether, before intimating to the House the Government's proposals for implementing the Salter Report, he proposes to circulate them for criticism to the interests affected?

Mr. STANLEY: No, Sir. Full consideration has been given to the numerous written representations already submitted by representative organisations, and I see no sufficient reason for a further series of consultations prior to the introduction of a Bill in Parliament. Such a course would inevitably lead to considerable delay. I shall, however, be ready at any time to consider and discuss any suggestions that may be made to me in connection with the Government's scheme when it is before the House.

Mr. T. WILLIAMS: Will the hon. Gentleman be good enough to give Members of this House plenty of notice before his proposal is brought on the Floor of the House?

Mr. STANLEY: The introduction of the Bill will do that.

ROAD CONSTRUCTION, SCOTLAND.

Sir PATRICK FORD: 21.
asked the Minister of Transport what is the total estimated cost of the new Glencoe road from Tyndrum through Glenorchy and Glencoe to Carnach, near Ballachulish; and why it was decided to spend so large a sum on an arterial road in this district instead of spreading over at least part of it on road construction of more economic value in other parts of Scotland?

Mr. STANLEY: The total estimated cost of constructing the 30 mile section of the Glasgow-Inverness trunk route lying between Tyndrum and Carnach is £512,000. The scheme was included in the trunk road reconstruction programme initiated in 1924–25 as part of the unemployment programme for that year. The importance of this route, in an area where communications are notably deficient, was held to afford good grounds
for the expenditure. I would remind my hon. Friend that important schemes were also assisted in more populous parts of Scotland, as for example the new Edinburgh-Glasgow road, which was of greater magnitude than that to which he refers.

Sir P. FORD: Is it not a fact that a great deal of this, to my mind, unnecessary expense is due to too rigid an application of a rule regarding gradients, which is well worth while in England but in areas of the character of the Highlands causes unnecessary expense?

Mr. STANLEY: That appears to me to be quite a different question from the one on the Paper.

MOTOR DRIVERS (PHYSICAL FITNESS).

Mr. ROSS TAYLOR: 22.
asked the Minister of Transport if, in view of the number of accidents on the roads, some of which are due to physical disability and, in particular, defective vision on the part of drivers, he will institute a system for testing the declarations in regard to physical fitness made by applicants for motor-driving licences?

Mr. STANLEY: Under the Road Traffic Act, 1930, every applicant for a licence to drive a motor vehicle is required to make a declaration in a prescribed form as to his physical fitness, including eyesight. Any person who knowingly makes a false statement is liable to severe penalties under the Act. I have no evidence to show that false declarations are frequent, and, in any case, I think it would be well to gain some rather longer experience of the operation of the provisions of the Act before coming to any conclusion as to the need for imposing further requirements in regard to physical fitness.

TRAFFIC NOISES.

Mr. LOVAT-FRASER: 23.
asked the Minister of Transport if he is aware that the noise abatement committee of New York has done much to check transport noise in that city; and if he will take steps to have a similar body appointed here?

Mr. STANLEY: I have no information as to the steps taken by this Committee, but I am making inquiries and will then consider whether there is any further action which could usefully be taken.

Mr. LOVAT-FRASER: 24.
asked the Minister of Transport how many cases of enforcement have taken place during 1932 under the regulations forbidding the use of motor-cycles which are not fitted with silencers?

The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Douglas Hacking): I have been asked to reply. I regret that I cannot give the information asked for, as the returns made by the police for purposes of the annual return of motoring offences do not distinguish between motor-cycles and other motor vehicles in respect of noise offences.

Mr. LO VAT-FRASER: 51.
asked the Secretary of State for the Home Department if he is aware that, on the adjournment of the Committee on Traffic Noises sine dieabout three years ago, Sir Henry Maybury, the chairman, promised that the Ministry would refer the question of evolving a standard motor-horn, which should be at once effective and less injurious to the health and nerves of the community, to the committee of research; and whether anything has been done with regard to this?

Mr. STANLEY: I have been asked to reply. Inquiries were made from the National Physical Laboratory, and the conclusion was reached that further expenditure on experiments directed towards the production of a standard type of motor-horn was not likely to be useful in results.

Oral Answers to Questions — GOVERNMENT DEPARTMENTS.

EDINBURGH.

Mr. SCRYMGEOUR-WEDOERBURN: 25.
asked the First Commissioner of Works whether it is the intention of the Government to proceed immediately with the building of new Government offices in Edinburgh; and whether he can make any statement on this subject?

Sir SAMUEL CHAPMAN: 26.
asked the First Commissioner of Works whether, in view of the many suggestions which have been made and discussions which have taken place during the last 10 years as to the advisability of concentrating in one building the numerous Government offices which are scattered all over Edinburgh, and in view of the
present low cost of building, he will consult with the Secretary of State for Scotland for the purpose of taking action to effect this improvement in the interests of economy and efficiency?

The FIRST COMMISSIONER of WORKS (Mr. Ormsby-Gore): The possibility of proceeding with the scheme for centralising Departmental staffs in one building in Edinburgh is at present under consideration by both the Secretary of State for Scotland and myself. As my hon. Friends are no doubt aware, there are certain site and architectural problems which must be resolved, before a decision whether to proceed with the projected scheme can be taken.

Mr. SCRYMGEOUR-WEDDERBURN: Can my right hon. Friend say whether Edinburgh will be given equality and similarity of treatment with Whitehall in any extension or reconstruction of Government offices that may be undertaken; and is he aware that great indignation is caused in Scotland by the delay in the erection of this building?

Mr. ORMSBY-GORE: I am agreeably surprised at the last part of my hon. Friend's question. Hitherto the whole matter has been held up by grave differences of opinion as to the site, style, and character of the building to be erected in Edinburgh, which has made the Government very shy of proceeding with it. The other question was, if I may say so, rather hypothetical, as there is no decision as yet to proceed with the Whitehall scheme.

Mr. BOOTHBY: Will my right hon. Friend consider the advisability of providing an official residence for the Secretary of State for Scotland in Edinburgh?

Mr. ORMSBY-GORE: I should like notice of that question.

Mr. McGOVERN: Have the Department considered any sites at all for these offices in Glasgow?

Mr. ORMSBY-GORE: The answer is in the negative. I understand that Edinburgh is regarded as the administrative capital of Scotland.

LONDON.

Mr. LEVY: 28.
asked the First Commissioner of Works if any decision has
yet been reached on the proposal to re-house a number of the Departments under one roof in Whitehall?

Mr. ORMSBY-GORE: The answer is in the negative.

Mr. LEVY: Will my right hon. Friend press on with this scheme as a measure of economy and a source of employment in the building industry?

Mr. ORMSBY-GORE: I am glad the hon. Gentleman put the first supplementary question first. I am at this moment going into the question as to whether an economical scheme can be worked out, assuming that we accept the decision of Parliament that the original scheme cannot proceed, and that we cannot have all the land originally contemplated; and I am examining the question as to whether effective economies can be made by proceeding with a modified scheme.

Mr. LANSBURY: Before arriving at that decision, will the right hon. Gentleman put the case again to this House? Is he aware that it was only a committee, I think a Joint Committee, that reported, but it was not a unanimous decision, and that there is weighty opinion against the decision of that committee? I am only asking if the right hon. Gentleman will reconsider the whole question without settling for good and all that the site should not be entirely used?

Mr. ORMSBY-GORE: Since the committee advised against building over any of the open spaces by the Embankment, so far as I can gather public opinion in this country has grown against building over any grass or open spaces in London, and I think a reconsideration of that point might lead us into even further difficulties and delays before we could get the matter considered on its merits.

Mr. LANSBURY: Will the right hon. Gentleman bear in mind the fact that an open space in Whitehall would be preserved, and that it is only a question of a choice of open spaces?

Mr. ORMSBY-GORE: It is a question of the building line towards the Thames.

Mr. HERBERT WILLIAMS: Would not the problem be solved entirely if my right hon. Friend's colleagues employed fewer people?

Ex-SERVICE MEN (PENSIONS).

Mr. CLARRY: 54.
asked the Financial Secretary to the Treasury whether it is the intention of His Majesty's Government to grant pensionable status to the P-class and temporary ex-service technical staff in the Civil Service who have attained the prescribed qualifying service for the clerical staffs; and if he will favourably consider the claim submitted by the Association of Ex-service Civil Servants on the 26th September last at an early date?

The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): Representations have been received from the association referred to, amongst other bodies, with regard to the position of certain technical staffs temporarily employed in the Government service. It is not yet possible to indicate what will be the outcome.

Oral Answers to Questions — WESTMINSTER HALL (WARREN HASTINGS TABLET).

Major MILLS: 27.
asked the First Commissioner of Works whether he will follow the precedent set by the tablet in Westminster Hall to Sir William Wallace, who is described thereon as the Scottish patriot, by adding the words First Governor-General of India after the name of Warren Hastings on the new tablet to be placed in Westminster Hall to commemorate the place, date, and issue of the latter's trial?

Mr. ORMSBY-GORE: I should hesitate to lengthen still further the revised inscription which has been agreed with the donor and the Royal Empire Society. The general public are, I think, aware of the fact that Warren Hastings was Governor-General of India.

Major MILLS: Will my right hon. Friend take a long view of the help that it would be to the Martians when they are excavating sites in ancient London about the year 7033 to have this additional information?

Oral Answers to Questions — NAVAL AND MILITARY PENSIONS AND GRANTS,

Mr. SMEDLEY CROOKE: 29.
asked the Minister of Pensions how many of the 361 cases recognised outside the seven years' limit during 1932 have actually been granted a pension?

The MINISTER of PENSIONS (Major Tryon): Of the 361 cases referred to in the question, 272 received monetary compensation and 89 cases were found to require no more than medical or surgical treatment.

Oral Answers to Questions — AGRICULTURE.

OATS.

Mr. BOOTHBY: 30.
asked the Secretary of State for Scotland whether he is aware that the average wholesale price of oats in Germany during the year 1932 was 10s. 2d. per cwt., and of oats consigned from Germany and marketed in this country was 5s. 7½d.; whether he considers that the latter price is a remunerative one for Scottish farmers; and whether he proposes to take any action in the matter?

The SECRETARY of STATE for SCOTLAND (Sir Godfrey Collins): The answer to the first part of the question is in the affirmative, subject to the observation that 5s. 7½d. was not the average price at which oats imported from Germany were marketed in this country, but the average declared value on importation which does not include import duty. The average price of oats in certain representative Scottish markets during the year 1932 was 7s. per cwt. With regard to the second and third parts of the question, as I indicated yesterday in my answers to the hon. Member for Moray and Nairn (Mr. Stuart) I fully appreciate the seriousness of the situation with regard to oat prices in Scotland.

Mr. BOOTHBY: Can my right hon. Friend say when he will be in a position to make some announcement with regard to the oat policy of the Government?

Sir G. COLLINS: I cannot say when I shall be able to answer that question.

CREDITS (SCOTLAND).

Mr. BOOTHBY: 31.
asked the Secretary of State for Scotland what is the rate of interest charged to farmers by the corporation set up under the Agricultural Credits Act?

Sir G. COLLINS: I understand that the corporation has not yet announced the terms on which they are prepared to make loans under the Agricultural Credits (Scotland) Act.

Mr. BOOTHBY: Will my right hon. Friend bring to the notice of the corporation the fact that, owing to the reduction in interest charges on Government securities, the Government of Northern Ireland has made a reduction in interest charges by the corporation, and will he represent to the corporation that it is desirable that it should keep its charges as low as possible?

Sir G. COLLINS: I will make representations to the corporation.

WHEAT DEFICIENCY PAYMENT.

Mr. THORNE: 44.
asked the Minister of Agriculture the date when the next wheat subsidy is due to be paid to farmers by the Wheat Commission; and the total amount paid up to the nearest available date?

The MINISTER of AGRICULTURE (Major Elliot): The Wheat Commission have decided to make, on or about 25th March, a payment on account of the deficiency payment to which registered growers are entitled under the Wheat Act, 1932, in respect of valid wheat certificates received by the commission during the period 1st December, 1932, to 28th February, 1933 (inclusive). The hon. Member will recollect that the commission have already made an advance payment in respect of certificates received up to 30th November last, and I am informed that the total amount paid to date in respect of that advance is £1,283,535.

Mr. THORNE: Does the right hon. and gallant Gentleman think that he is getting value for money?

Mr. BANFIELD: How much of this wheat is used in the manufacture of flour?

Oral Answers to Questions — POST OFFICE.

TELEGRAPH AND TFLEPHONE POLES.

Lieut.-Colonel ACLAND-TROYTE: 35.
asked the Postmaster-General whether, in view of the dislocation of the service caused by the breaking of telegraph and telephone poles during the recent severe weather, he will consider the gradual replacement of these foreign poles by English-made poles of steel or iron, which are not liable to be broken in this manner?

The ASSISTANT POSTMASTER-GENERAL (Sir Ernest Bennett): Steel telegraph poles are much dearer than wooden poles of equal strength; and the substitution of steel for wooden poles would therefore result in greatly increased expenditure. The breakage of telegraph poles is very rare, and in the recent blizzard the main cause of the breakages was the weight and wind resistance of masses of snow and ice accumulated on the wires.

Lieut.-Colonel ACLAND-TROYTE: Would not steel poles have stood that weight better than wooden ones?

Sir E. BENNETT: Possibly, but they are more expensive and are not always reliable, because they corrode, not only externally, but internally. We can deal with external corrosion by frequent layers of paint, but the corrosion inside is another matter and the poles may snap at any moment.

Mr. T. GRIFFITHS: Is the hon. Gentleman aware that no damage whatever was caused to the wireless pillars and structures and the electricity structures in South Wales because they are made of steel, and will he consider the advisability of replacing wooden telegraph poles by steel poles as that will give employment in the steel trade and the mining industry?

Sir E. BENNETT: I have already stated the reason why we do not employ them at present. It is because we cannot afford it.

Captain HAROLD BALFOUR: In arriving at the cheapest method of putting up telegraph posts, has the hon. Gentleman considered the saving in unemployment benefit that will result from employing men to make steel poles instead of wooden poles?

STAMP-CANCELLING MACHINES.

Mr. MITCHESON: 33.
asked the Postmaster-General if he is aware that many of the cancelling machines used by the Post Office with the stamp reading Buy British are made in America; and if he will take steps to obtain such appliances from British sources in future?

Sir E. BENNETT: I would refer the hon. Member to the reply given by my
right hon. Friend to the hon. Member for Moseley (Mr. Hannon) on Monday, the 27th February.

Oral Answers to Questions — CHINA AND JAPAN (ARMAMENT CONTRACTS).

Mr. MORGAN JONES: 38.
asked the President of the Board of Trade if he can inform the House as to the number of the contracts for armaments in existence on 27th February between British manufacturers and merchants and the Governments of China and Japan, respectively, for which his Department has issued licences?

Lieut.-Colonel COLVILLE: An immediate survey is being undertaken of export licences which are still valid with a view to securing this information. When I am in a position to give it I will communicate with the hon. Member so that he can put down the question again.

Mr. JONES: May I take it that the hon. and gallant Gentleman will expedite the inquiries as much as possible?

Lieut.-Colonel COLVILLE: There will be no unnecessary delay.

Oral Answers to Questions — UNEMPLOYMENT.

LAND RECLAMATION (BLACK COUNTRY).

Mr. BANFIELD: 40.
asked the Minister of Health whether he will consider the advisability of furthering schemes submitted to him by local authorities for the reclamation of waste and unsightly land in the Black Country, in order to alleviate unemployment and improve the amenities of the district?

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Shakespeare): My right hon. Friend is prepared to sanction a loan for any scheme within the powers of a local authority if it is remunerative or if good reason can be shown for proceeding with it at once. As the hon. Member is aware the Government do not regard the policy of relief works as likely to provide an effective remedy for unemployment and my right hon. Friend is accordingly not prepared to sanction loans for works undertaken primarily as relief works.

Mr. T. WILLIAMS: Has the hon. Gentleman's Department or any other Department any effective remedy for unemployment?

TRANSITIONAL PAYMENTS, TYNESIDE AREA.

Sir N. GRATTAN-DOYLE: 55.
asked the Minister of Labour whether he is aware that the scale of transitional payments for single adults in lodgings is 15s. 3d. in Durham, as against 12s. 6d. in Newcastle; for adults living with parents, 10s. in Durham and 6s. in Newcastle; for children under 18, 3s. to 8s. in Durham and 2s. in Newcastle; and whether he will sympathetically consider making provision for avoiding such inequalities in the projected Unemployment Insurance Bill?

The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. R. S. Hudson): I am aware that there are differences in the scales of transitional payments in the Tyneside area based upon existing differences of public assistance practice. My hon. Friend will remember that a conference of local authorities was called by the Minister of Health a year ago to consider this point and I can assure him that it will be borne in mind in connection with future legislation.

Sir N. GRATTAN-DOYLE: Will my hon. Friend undertake to impress on the Minister the desirability of bringing those inequalities to an end as soon as possible?

Mr. McGOVERN: Will the hon. Gentleman bear in mind that in many parts of the country a considerable number of house-breaking cases are directly attributable to the fact that unequal payments—inadequate payments—have been given to a large number of young men?

Mr. T. WILLIAMS: Is it not the case that the public assistance committee in Newcastle are very largely responsible for this discrimination?

Mr. HUDSON: The public assistance committee in Newcastle have the matter of the scales in their own hands. My right hon. Friend is not responsible for the scales which they adopt.

Oral Answers to Questions — OFFICIAL SECRETS ACT (OFFICER'S ARREST).

Mr. McENTEE: 41.
asked the Financial Secretary to the War Office if his attention has been drawn to the fact that Messrs. Foster, Wells, and Coggins, the solicitors of Lieutenant Baillie Stewart, are an Aldershot firm; and whether to assist this officer in the preparation of his defence and to minimise the expense, he will arrange for Lieutenant Stewart to be transferred from the Tower to Aldershot?

Mr. COOPER: The answer to the first part of the question is in the affirmative, but it is not considered that it would be to the advantage of the accused officer to re-transfer him to Aldershot.

Mr. McENTEE: Is it not a fact that in the answer given to me last week the hon. Gentleman said that one of the principal reasons for transferring this officer from Aldershot to the Tower was to enable him to prepare his defence; and, in view of the fact that the solicitor actually lives at Aldershot, how does that square with the refusal to allow him to be near his solicitor, and will it not impose upon him the extra expense of bringing his solicitor to the Tower?

Mr. COOPER: While it is true that his solicitor is at Aldershot, his counsel is in London, and I should imagine that the expense of his counsel going to Aldershot would be higher than his solicitor coming to London.

Mr. McENTEE: Is it not a fact that the consultations will be with the solicitor and not with counsel, and, in view of that, will not the hon. Gentleman give this officer the opportunity to consult his solicitor under reasonable conditions?

Mr. COOPER: Every opportunity is given to him to consult with his solicitor, but it is obvious that his solicitor and counsel must keep in very close touch. That necessitates the solicitor and counsel meeting, and one of them must travel between Aldershot and London, and it is obviously to his advantage that the solicitor should travel to London, rather than that the counsel should travel to Aldershot.

Mr. MAXTON: What is the idea of the fixed bayonets business?

Mr. McENTEE: 42.
asked the Financial Secretary to the War Office whether
Lieutenant Baillie Stewart has yet been informed of the charges against him and, if not, when the information will be furnished; whether he is aware that this officer had to perform his toilet under the guard of soldiers with fixed bayonets; and that he was refused the opportunity of consulting his solicitors before leaving Aldershot for an unknown destination?

Mr. COOPER: Yes, Sir, Lieutenant Baillie-Stewart has been informed of the charges against him. I am aware that an officer is present when the accused is shaving and that a sentry was present during the first few days of his arrest. As regards the last part of the question, the accused has been in continuous communication with his solicitors, although there may not have been an opportunity for him to consult them immediately prior to his departure from Aldershot.

Mr. McENTEE: May I ask why it is considered necessary, before a man has been found guilty of anything, that, when he is shaving with an ordinary safety razor, two soldiers with fixed bayonets should be on either side of him?

Mr. COOPER: Two soldiers were not present. In the early days a private soldier was present carrying the ordinary weapons which he would be carrying at any time. The commanding officer has replaced him by having an officer present while this officer is shaving. He is under a very serious and grave charge, and the reason must be obvious to every hon. Member of the House why the closest supervision is necessary.

Oral Answers to Questions — GREAT BRITAIN AND UNITED STATES (DISCUSSIONS).

Mr. LEVY: 45.
asked the Prime Minister if he can yet make a statement on the personnel of the British delegation to Washington to discuss the debts settlement?

The PRIME MINISTER (Mr. Ramsay MacDonald): I would refer my hon. Friend to the answer which I gave on the 22nd February in reply to a question by the hon. Member for Don Valley (Mr. T. Williams), to which at present I have nothing to add.

Mr. LEVY: Can the right hon. Gentleman say whether he proposes to go himself?

The PRIME MINISTER: That is covered by the answer I have just given.

Oral Answers to Questions — WORLD ECONOMIC CONFERENCE.

Mr. LINDSAY: 46.
asked the Prime Minister whether the question of the reduction of hours of labour will be considered by the World Economic Conference?

The PRIME MINISTER: As my hon. Friend is probably aware, this subject has been under consideration by the International Labour Organisation, and I cannot say at present whether or in what form it may come before the World Economic Conference. It is not included in the Draft Agenda prepared by the Preparatory Committee of Experts.

Mr. LINDSAY: Is it not the fact that the report of the International Labour Conference is not to be considered until July, and will the right hon. Gentleman not consider the inclusion of this very important question?

The PRIME MINISTER: It is not in my hands.

Mr. MAXTON: Having regard to the fact that world conditions have taken a very serious turn since the agenda was drafted, particularly in the United States of America and in Germany, do I understand from the Prime Minister that it will be impossible to add subjects to the agenda as now drafted?

The PRIME MINISTER: No, I do hope the House will not put that meaning on what I have said. It is not impossible to add subjects to those provided for by the Experts Committee, but, naturally, by the terms of the Conference, I am not going to invite all and sundry to overburden the agenda.

Mr. HICKS: In the event of it being possible to include the question of hours in the agenda, will the British Government give such a proposal their favourable consideration and sympathy?

The PRIME MINISTER: It is not merely the British Government which will have to decide on that matter. It will have to be decided in accordance with the ordinary rules of chairmanship.

Mr. HICKS: In view of the fact that at the Preparatory Conference at Geneva the British Government took up an attitude which was an unenviable one, in my opinion, is it not possible for the British Government to adopt a friendly attitude towards the question of the reduction of the hours of labour?

The PRIME MINISTER: That is a misapprehension of what was the attitude of the British Government.

Mr. H. WILLIAMS: Is the right hon. Gentleman bearing in mind that the House gave a considered decision on this subject last December, when it rejected a certain Bill by a very large majority?

Oral Answers to Questions — LAW CASES (APPEALS).

Mr. TURTON: 47.
asked the Attorney-General how many persons appealed by way of a case stated from courts of summary jurisdiction to the High Court of Justice during the year 1932; in how many cases was the appeal allowed; in how many dismissed; and in how many was the case remitted to the court of summary jurisdiction?

The ATTORNEY - GENERAL (Sir Thomas Inskip): During the period mentioned there were 62 appeals; 26 were allowed; 23 were dismissed and five cases were remitted to courts of summary jurisdiction.

Mr. TURTON: 49.
asked the Home Secretary how many persons appealed from courts of summary jurisdiction to courts of quarter sessions during the years 1931 and 1932, respectively; in how many cases the decisions of the court of summary jurisdiction were quashed or altered; and in how many cases they were affirmed?

Mr. HACKING: Statistics for 1932 are not yet available. In 1931, apart from appeals in affiliation cases and those relating to rates and similar matters, 281 persons appealed from decisions of courts of summary jurisdiction to quarter sessions; in 117 cases the decision was affirmed without modification; in 96 cases it was affirmed with modification of sentence; in 65 cases the conviction or order was quashed, and in three cases the appeal was abandoned.

Mr. TURTON: 50.
asked the Home Secretary how many persons appealed to the Court of Criminal Appeal in the years 1931 and 1932, respectively; in how many cases the conviction was quashed; and in how many cases the sentence was quashed or altered?

Mr. HACKING: The statistics for 1932 are not yet available. During the year 1931 there were 513 applications to the Court of Criminal Appeal for leave to appeal; in 30 cases the conviction was quashed, and in 35 cases the sentence was quashed or altered.

Oral Answers to Questions — HOUSING.

LOAN INTEREST.

Mr. HUTCHISON: 53.
asked the Chancellor of the Exchequer whether, in view of the high rate of interest now being paid for loans under the Small Dwellings Acquisition Acts, he will consider the possibility of floating a large conversion loan to embrace either all such advances or a portion of them, with the object of reducing the interest rate to the level of the interest on the late conversion loan?

Mr. HORE-BELISHA: I would refer my hon. Friend to the reply given to the lion. Member for East Woolwich (Mr. Hicks) on the 10th November last, of which I am sending him a copy.

SCOTLAND.

Mr. DUNCAN GRAHAM: 32.
asked the Secretary of State for Scotland whether, having regard to the precedent of 1928, when an extra year was granted for the completion of 'State-aided houses under the 1924 Act in Scotland, and having regard also to the desire that slum-clearance schemes should be prosecuted with the utmost vigour, he will be prepared, in view of the anxiety of local authorities to be informed of their position after 1st October next, to make an announcement now as to any extended date by which houses eligible for the present rates of subsidy must be completed?

The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Skelton): My right hon. Friend fully appreciates the anxiety of local authorities in this matter which is at present under his consideration.

Mr. HICKS: Do I take it that steps will be taken to communicate to the authorities the end of the period during which the subsidy will be paid, in order that there may not be a rush, with men working overtime and then becoming unemployed? Would it be possible to communicate the dates upon which the subsidies will finish, in order that the work may be spread over?

Mr. SKELTON: I cannot add more definitely to my answer at the moment further than to say that the precedents of the previous occasions in 1926 and 1928 are being kept in mind.

Oral Answers to Questions — LEAGUE OF NATIONS (NEW BUILDINGS, GENEVA).

Mr. HALL-CAINE: 1.
asked the Secretary of State for Foreign Affairs if he can state how many contracts in connection with the new Palace of Nations at Geneva have been allocated to British firms; and what proportion of the total cost the value of these contracts will be?

Sir J. SIMON: The total estimated cost of the Palace of Nations at Geneva is 30 million gold francs, of which 4½ million francs have been generously given by Mr. Rockefeller to cover the cost of the new library. Up to date contracts amounting in all to approximately 151 million francs have been allocated, and of these, two, amounting together to about 870,000 francs have been awarded to British firms. The proportion which the value of these two contracts bears to the total value of the contracts so far awarded is 5.6 per cent.

Mr. HALL-CAINE: Having regard to the large contribution made by this country towards the building of this house, does not the right hon. Gentleman think that Great Britain ought to have a greater share of the contract?

Sir J. SIMON: The matter, of course, is not one which can be decided by any one country. There is an international committee which considers tenders.

Sir PERCY HARRIS: Will the right hon. Gentleman say whether the tenders are competitive?

Sir J. SIMON: I cannot give a general answer to that question, but in the cases I have inquired into undoubtedly tenders were called for and examined one against another.

Captain CROOKSHANK: Does not the right hon. Gentleman think this would be a very funny building if it were built in proportion to the contributions paid by all the nations of the world?

Oral Answers to Questions — ENTERTAINMENTS DUTY.

Mr. BUCHANAN: 52.
asked the Chancellor of the Exchequer the total yield from the taxation on entertainments up to and including 6d. admission; and the revenue derived from admission to cinemas?

Mr. HORE-BELISHA: I am afraid that, the information desired cannot be given, as detailed statistics of the Entertainments Duty at the various prices of admission are not compiled, nor are any figures available showing the amounts of duty paid in respect of particular classes of entertainment.

Mr. MAXTON: How does that come about? Are not the various stamps sold at their various prices, and should it not be possible for the Department to get the amounts of them?

Mr. HORS-BELISHA: Yes, but a number of stamps of small denominations may be agglomerated to pay for seats of a higher class, and it is impossible to tell.

Mr. T. WILLIAMS: Could not the hon. Gentleman obtain the information asked for in the question, and also information as to the reduction in the number of attendances since the ld. duty was imposed?

Mr. HORE-BELISHA: I am afraid that it is impossible. Naturally, when the question was put down, I did try to obtain that information, but it is quite impossible.

Oral Answers to Questions — GERMANY.

Mr. BOOTHBY (by Private Notice): asked the Secretary of State for Foreign Affairs whether his attention has been drawn to the serious situation in Germany; whether he can give the House any information on the subject; whether he is satisfied with regard to the security of British lives and property in Germany; and whether he proposes to make any representations to the German Government?

Sir J. SIMON: I receive, of course, frequent reports from His Majesty's Ambassador in Berlin on the situation in Germany. There is no specific fact to add to the matters of fact already reported in the Press. As regards the safety of British lives and property, I must assume that the German Government will continue to discharge their responsibility in reference to British subjects and interests in Germany, and I therefore have no ground for making any representations to the German Government.

Mr. BOOTHBY: May I ask whether the Minister has seen the report in today's Press that the German Government intend to carry out a purge of its political opponents, following upon the alleged attempt upon the life of the Chancellor, and will he make some inquiry as to whether there is any truth in those reports?

HON. MEMBERS: Why?

Sir J. SIMON: I have already said that I am in frequent communication with our own Ambassador. I would remind my hon. Friend that the question that he put to me by the leave of Mr. Speaker had to do with the security of British lives.

Mr. LANSBURY: May I ask the right hon. Gentleman, not whether he will make representations to the German Government, but whether, in view of the statements that are very widespread in the Press to-day, he will ask the British Ambassador in Berlin to give him a report on the subject? The right hon. Gentleman himself has called attention in his answer to the fact that the Press contains a good deal of very alarmist news, and people with relations in Berlin wish to be reassured on the subject.

Mr. MICHAEL BEAUMONT: Before the right hon. Gentleman replies, may I ask whether he will bear in mind the necessity of allowing the Germans to manage their own affairs?

Colonel WEDGWOOD: Will the right hon. Gentleman make known to the German people the feelings of British subjects on this matter?

Mr. ALBERY: May I ask whether it is not still quite possible for British
people to telephone, telegraph or write letters to Germany, and to get adequate replies?

Mr. MAXTON: May I inquire, as to the number of men who are now bearing arms in Germany, and whether the peace treaties that are being infringed—

Mr. SPEAKER: This is going much too far beyond the original question.

Mr. LANSBURY: May we not have an answer from the right hon. Gentleman as to whether he will ask our Ambassador in Berlin to give him a report on the present situation?

Sir J. SIMON: I was waiting to answer the Leader of the Opposition, but a number of other questions were put to me. It is, of course, part of my duty, and part of the Ambassador's duty, that we should keep ourselves in constant communication. I shall not fail to do my duty in that regard, nor, I am sure, will he.

Oral Answers to Questions — VISITING FORCES (BRITISH COMMONWEALTH) BILL [Lords].

Order [28th February] that the Bill, as amended (in the Standing Committee), be printed, read, and discharged.

BILLS REPORTED.

MINISTRY OF HEALTH PROVISIONAL ORDER (CHESTER AND LANCASTER) BILL.

Reported, with Amendments [Provisional Order confirmed]; Report to lie upon the Table.

Bill, as amended, to be considered Tomorrow.

MINISTRY OF HEALTH PROVISIONAL ORDER (ETON JOINT HOSPITAL DISTRICT) BILL.

Reported, with Amendments [Provisional Order confirmed]; Report to lie upon the Table.

Bill, as amended, to be considered To-morrow.

PRESTON CORPORATION BILL.

Reported with Amendments; Report to lie upon the Table, and to be printed.

MESSAGE FROM THE LORDS.

That they have agreed to,—

Public Works Facilities Scheme (Torquay Corporation) Bill, without Amendment.

CIVIL ESTIMATES (SUPPLE ENTARY ESTIMATE, 1932).

Estimate presented,—of a further Sum required to be voted for the service of the year ending 31st March, 1933 [by Command]; Referred to the Committee of Supply, and to be printed.

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE A.

Mr. William Nicholson reported from the Committee of Selection; That they had discharged the following Member from Standing Committee A: Captain Arthur Hope; and had appointed in substitution: Commander Agnew.

Report to lie upon the Table.

EXCESSIVE TAXATION.

3.35 p.m.

Mr. BOULTON: I beg to move:
That this House views with anxiety the existing high level of taxation and diminishing revenues in this country, believes that this creates an intolerable burden on industry, and urges His Majesty's Government to consider means by which this burden may be lessened at the earliest possible moment.
It is in no mere spirit of carping criticism that I venture to draw attention to the matters mentioned in the Motion. I know how easy it is to air views and to level criticism on such a wide and absorbing subject, and how often the difficulties and the responsibilities of the Chancellor of the Exchequer are forgotten. A year or even six months ago, I should not have felt justified in making this Motion, but the position has materially altered, and now warrants consideration and examination, perhaps from a wider and different angle. The quickly changing circumstances of to-day do not leave very much room for the strictly orthodox. If we are to approach the present-day position with any hope of success, we have to do so with a wide outlook and an elasticity of mind to which we have hitherto been unaccustomed.
To the credit of the Government, three important things have taken place in our national life during the year, which have weighed with me in drawing attention to this question. The first is that financial stability has been restored and the conspicuous ability with which our finances have been handled by the Chancellor of the Exchequer has placed the credit of this country at a higher level than it has enjoyed for a very long time. The second factor is the reversal of our fiscal system, and the third is the Ottawa Agreements. These three factors have made for general stability. They have given us tremendous power, and solid ground as a jumping-off point for using that stability for constructive purposes. The limits of taxation have been reached and passed, as is shown by the declining Revenue and unemployment is at a terribly high figure, and, although the industrial outlook is brighter and there are definite indications of recovery, it is no use blinding our eyes to the fact that confidence is
still lacking—the want of inducement to take business risks.
It has been pointed out that large sums of money are lying at the banks waiting for investment and for industrial development. That is true, but that money constitutes the working capital of the country. What is to bring it into active use? Money, like everything else, requires an inducement for use. It has to be given a fair opportunity to make a fair return for reasonable business risk. It is beyond doubt that the heavy burden that is being placed upon our people and upon industry, especially in high rates and taxes, is one of the main factors, if not the main factor, that is stifling industry. It is an obstacle to creating the inducement to release that great volume of working capital, which is the lifeblood of industry. It is hardly necessary for me to remind the House of the distressing effects that high taxation is having on the many thousands of small investors who are living upon their hard-earned savings, and have barely enough to keep a home together, but who are bearing their hardships so quietly; but it is more particularly from the industrial point of view and from the point of view of the effects on unemployment that I want to draw attention to this matter to-day.
This country is taxed about one-third higher than the next highest taxed nation in the world. What does that mean to the competitive power of industry in the markets of the world? In reply to a question in this House as to what it would cost the Exchequer if all company reserves were released from Income Tax, it was stated that in a normal year, at the standard rate of 5s. in the £, it would cost the Exchequer £60,000,000 a year. Think what that means. With £60,000,000 in cash, you could command £600,000,000 of credit. That is some indication of what industry is up against. When we realise the conditions under which our industries are working, and particularly the basic industries upon which we rely and upon which we shall have to depend for our future existence, and the struggle that they are engaged in against world barriers, I would ask the House, can we afford to continue to allow the risk which industry in compelled to take at the present high level of taxation, or is it
better to shift the risk and lighten some of the burdens that it now carries?
It is with the broader and more general effects of taxation that I am particularly concerned, but, if the House will bear with me for a few minutes, I would like to give one instance, even at the risk of covering ground which may have been fully covered previously but which I believe is typical of the manner in which excessive taxation is affecting trade, and, consequently, revenue returns. It has been the tradition of our Chancellors, up to quite recent times at any rate, to see that the distribution of taxation should be as fair and just as was possible. Can we claim that for the brewing and allied trades. So long as we are allowed to eat and drink, of course in moderation, what we wish, these trades have a right to receive as fair treatment as any other trades. I do not wish to bore the House with figures, but I should like to give one or two in support of my contention. I do not propose to give many, because they have been so recently published in connection with the deputation which visited the Chancellor of the Exchequer. I would remind the House that in 1914 the Beer Duty was 7s. 9d. per standard barrel, and in 1932 it was 114s. 8d. In 1914, the net standard barrelage was 35,178,000. It fell in 1932 to 15,576,000. The Chancellor of the Exchequer, speaking in this House on the 21st April, 1932, said:
I see in beer one of the great sources of revenue to the State, which has been for some considerable time declining, and which suffered a severe acceleration of that process by reason of the increase in the duty last September. I do not wish to see such a source of revenue permanently undermined."—OFFICIAL REPORT, 21st April, 1932; col. 1762, Vol. 264.]
Let us see how this increased duty has affected the revenue of this country. In 1931, when the duty was 103s., the Chancellor collected from it, including Customs, £75,700,000. The estimate for the year ending April, 1933, the first full year of the increased duty of 114s. was £80,000,000. I am advised on very reliable authority that it is thought that the Chancellor will collect for the year —and this figure includes only two months for which the yield is estimated—£73,602,000. That shows a loss of £2,000,000 as compared with the amount that he collected in 1931, when the duty
was 103s., and is down by £6,000,000 on the estimate of 1932. At the present rate of loss, what is the year 1933–34 going to show? If it were a question of a decrease of £6,000,000 only, it might, perhaps, not be so perturbing, but how much additional loss is my right hon. Friend going to suffer in Income Tax and Surtax, on farmers' profits—if there are any—on maltsters' profits, which have fallen by 77 per cent., and on the profits of allied trades, in Death Duties on lower values, and in Schedule A licence duties in respect of public houses and buildings. Moreover, what is he losing in unemployment payments Taken together, these losses must represent a very large total.
It is difficult to estimate the number of those who have been thrown out of employment, but I think a very reliable indication is given by the wages bill, which shows a fall of 10 per cent. in the actual wages paid on the manufacturing side of the brewing industry, not including the allied trades. If we take all these into account, it must represent a very serious number of persons who are unemployed. I do not wish to labour the point further, for these figures speak only too clearly for themselves. I have only selected this trade because it has always been the most fruitful source of revenue. I hold no special brief for the brewing trade, but I do for justice. I think that the Chancellor of the Exchequer has the sympathy of the large majority of Members of this House, for he inherited this legacy from his predecessor, but I sometimes wonder what Lord Snowden's thoughts must be when he reflects on one of the greatest Budget miscalculation that, I suppose, has ever been made. He may, of course, have had other motives; I do not know; but I am always inclined to think, much as I sympathise with the temperance reformer, that he usually destroys his own case by being too intolerant.
What of the future? How are we going to replace these diminishing revenues? The present high level of taxation is ceasing to perform its natural function. What is going to be done? Unfortunately, my right hon. Friend who is going to reply will not tell me. But this April is the crucial time, and will decide and set the seal on what we can hope to achieve in the lifetime of this Parliament. It is the situation that I have outlined that
brings me to the definite conclusion that, however heterodox it may appear at the moment, my right hon. Friend might deflect the course of the financial ship a little with a view to escaping still fouler weather. The Government favours a long-term policy. I have no quarrel with that, but why not apply that policy when reviewing the whole field of taxation? The balancing of the Budget requires no stressing, but I suggest that the Government might take a three years' view of taxation. I may be thought bold, but I suggest that they might reduce the Income Tax by, say, is. 6d. in the £. I believe it would have an immediate and beneficial effect, but close observation of the result of that relief for a few months would quickly gauge the effect. Suppose we were down by £50,000,000 or £60,000,000, and a lesser amount in the second year, that surely need not perturb us. You still have ways and means to correct that.
If my calculations are correct—and I do not think they are very far out—there will this year be added some £40,000,000 to the National Debt. Who can doubt that it would have been fatal if the Chancellor had produced a Supplementary Budget to meet the prospective deficit by imposing taxation? Cannot we apply the same method and precedent in the event of there being a deficit in the first or second year? But the third year I believe you would get a rich reward. Although the conditions are different, I do not see why history should not repeat itself. I am not alone in that belief, for there are many men with far greater experience than I have, better qualified to speak than I am, and whose views are worthy of consideration, who hold the belief that I am expressing. I believe that the bold treatment of the disease of taxation by such means as I have suggested would do more to restore confidence and put heart into our people and into enterprise than anything else. The patient requires a changed treatment. I do not think there will be very much disagreement with that. Our Chancellors up to late years have kept the patient in splints, and have bound them ever tighter as each April came round. The circulation of the patient's blood has been somewhat overlooked.. Relax
the taxation bandages and strip some of them off, and see how the improved circulation of the blood will go far to invigorate the whole body politic. Increased purchasing power in the hands of the people will create demand, which will be reflected in every trade, and in our export trade, and will remove the greatest obstacle to greater employment.
It will be said, of course, that it is easy enough to suggest a reduction of taxation, but how can it be met, and what of the risk? The risk of the reduction of taxation is incomparably less than that of maintaining it at its present high level and maintaining 3,000,000 people in enforced idleness at a cost of £130,000,000 a year. At any rate, in present conditions I contend that at least it would be a sound and legitimate risk which the Government would be justified in taking and would be well advised to take. Such a risk is lightened by our restored stability, good credit and the increased power that we have in our hands from our tariff policy and the Ottawa Agreements, which have given us an entirely new outlook. We have also had the great Conversion Loans carried through with dexterous management and truly worthy of this country's financial reputation. That has given us some £30,000,000. There are two sources which my right hon. Friend might call to his aid to meet any problematical risk. If we have to borrow for the Sinking Fund, I would waive the Sinking Fund and reduce taxation. A real surplus is simply a surplus of revenue over expenditure. If there is no surplus, what is the use of borrowing to replace one form of debt for another? I, therefore, say suspend the Sinking Fund if necessary until better days. I will not trouble the House by quoting precedent or authority but I cannot do better than recall a letter recently written to the "Times" by my right hon. Friend the Member for Hill-head (Sir R. Horne) which, no doubt, will still be fresh in many of our minds.
But the most fruitful source from which my right hon. Friend can draw, and one that I particularly wish to stress, is the reduction of unnecessary and wasteful expenditure. Ever since the War, Governments and local authorities have spent on a colossal scale, and much of this has been expenditure of an unproductive nature which should properly be de-
ferred to a time of greater prosperity. In a word, we must cut our coat according to our cloth and the fact, that we have not carried out that practice is I think the cause of much of our difficulties in taxation. We are advised to spend wisely, and I entirely agree, but let us see to it that we discontinue and cut out now all expenditure which has been found to be unproductive. There can be little doubt by anyone who has taken the trouble to study the expenditure on some of our services that for much of it we are getting insufficient value. It is wise and intelligent retrenchment that I advocate and not simply shifting the burden from one section and harming another.
Since I put this Motion down I have been inundated with correspondence and suggestions from all parts of the country. I shudder to think what my right hon. Friend's postbag must be, but I do want to remind him, in case he should have overlooked them, of the official and unofficial economy reports. The conclusions and recommendations of those reports resemble each other in a, very marked degree. I had myself the privilege of serving, as a very humble Member, on the latter Committee. It has never been suggested that any individual Member could be expected to agree with all the recommendations made in that report, but I do say that those reports should be a guide and a value in showing the road to very substantial savings, and it will be interesting in due course to learn how far our labours have been appreciated.
The right hon. Gentleman the Member for Darwen (Sir H. Samuel), if I understood him correctly, has given us to u_nderstand that the objects for which His Majesty's Government were returned to power may be said to have been achieved. submit that the first object may be said to have been achieved, but the second, and no less important, has yet to be faced. Retrenchment falls within that category, and is not the least urgent, as we have been sharply reminded by the very disagreeable shock we have had in the publication of the Civil Estimates. I refuse to believe that the Civil Estimates, as issued, are the last word of the Government in the matter of national economy. It would be contrary to everything that my right hon. Friend has told us, that is, that the limits of economy
have not yet been reached. But it shows how vitally necessary the question of retrenchment is, and I am sure the right hon. Gentleman the Member for Darwen would not think me offensive or impertinent if I were to say that the attitude of himself and his followers has puzzled me a good deal, as, indeed, it does puzzle a very large number of their former supporters in the country, for, after spending a long summer's day with our Nationals, now in the wintry weather they are experiencing they appear to be finding an excuse for contemplating seeking warmer quarters. I say with all sincerity, is not their spiritual home standing side by side with the Government in pressing forward and supporting their own well-established principle and as a barrier against the peril as represented by hon. and right hon. Gentlemen opposite? I feel sure that I shall have the support of the right hon. Gentleman and his followers for this Motion, for, after all, it embraces one of the oldest and most cherished Liberal principles—retrenchment and reform.
I wonder if it is any use my appealing to those who sit on the opposite benches? [An HON. MEMBER: "Not an earthly."] I would, however, like to remind them, if I may be allowed to repeat what I ventured to say in this House when speaking some short time ago, that the question of Income Tax is not a class question. It is an industrial question, for every point of taxation imposed adversely affects, either directly or indirectly, the very poorest. Our social services are founded on a sound and prosperous industry. Destroy the foundation, and what becomes of your social services? Surely this question is worthy of their reconsideration, if for no other reason than in the interest of that great mass of unemployed persons who are expecting and waiting, not without hope, for some relief from their distress. It is with that object in view, and with that in view primarily, that I have ventured to move this Motion.
I must apologise to the House for having detained it longer than I intended, because I know there are many Members who wish to speak. In conclusion, I would say that to-day we have got to view these problems with a broad mind, with common sense and courage, boldness with prudence, the nation expects.
Timidity it will not tolerate. What I have ventured to advocate I can assure my right hon. Friend is in no lighthearted spirit, but from deep conviction, and it is with all humility that I do submit and stress that the time has now come when the Government should seriously consider the reversal of its taxation policy. I can well imagine and appreciate what such a change must mean to anyone who is responsible for the nation's finances, but I, for one, trust and believe, and I am sure that my right hon. Friend will face this issue with his accustomed, traditional family courage.

4.8 p.m.

Sir JOHN WARDLAW-MILNE: I beg to second the Motion.
I congratulate my hon. Friend the Member for Central Sheffield (Mr. Boulton) on having secured first place in the Ballot, and I may tell him that there are a large number of Members who have spent a good many years in this House who have never been so fortunate. I also congratulate him on his perspicacity and judgment in bringing forward a Motion so timely and important when the House is pressed on all sides and from all parts of the country to take its courage in both hands, to reduce taxation and at the same time to incur a good deal of new expenditure. It is one of the difficulties of a discussion of this sort that one is apt to be accused, perhaps naturally, of putting forward contradictory ideas in one speech. I am quite certain that what I have to say this afternoon will certainly lay me open to a charge of that kind, but I think that the extraordinary conditions which we are passing through at the present time justify any departure from precedent in these matters, and, in fact, our difficulties cannot be got over so far as the remedies are under our control here at home, except by both expenditure and economy.
I well remember, and many other hon. Members will also recollect, the speech of the Chancellor of the Exchequer when he introduced his Budget about a year ago. At that time he said that the path of financial stability was hard and stony, and the road long and weary, and he added that the whole country was crying out for relief from taxation. At that
time my right hon. Friend the Chancellor of the Exchequer, perhaps naturally, did not feel able to give that relief for which the country was crying so bitterly. I do not quarrel with that, but I think it is clear that what may not have been possible a year ago may certainly be possible to-day. The position is not whether you can produce a complete and an accurate balance sheet which will enable you to reduce taxation. These are not the conditions under which this country to-day can look at this matter. It is not a. question only of justice. Everyone will agree that the taxpayer, to whose self-sacrifice eloquent tributes were paid a year ago, is well deserving of relief, but it is not only a question of justice, it is a question purely of economic accountancy. In our own interests, we cannot go on without industry being relieved of the burden of taxation which is bearing upon it. It is a, truism, but it possibly bears continual repetition, that not only, as my hon. Friend has said, does all taxation come out of industry, but that everything we have, every emolument, every salary, whatever our occupation, primarily comes out of productive industry, and unless we can keep that industry prosperous and enable it to expand, there is no other economic subject that is worth discussion in the country, because on that all depends.
Therefore, if we are to spread the immense burden which this country is bearing over larger tracts of the production area, it can only be done by making industry prosperous. For that reason alone, quite apart from any question of justice, it is to our interest to see what relief will give an impetus to enterprise and will put new life into existing industry. I think there are three causes which prevent that expansion of industry which we all want to see. The first of these is concerned with conditions all over the world. Industry, above all other things, wants industrial world peace, which means political peace. It wants, if possible, to be assured that the ordinary political conditions of the world are not likely to be violently upset, as, unfortunately, there is every sign they are going to be, in the East at any rate, at the present moment. In that regard the Government can do no more than it is doing at the present time. It means international agreement and international negotiation. It means sup-
port for the objects of the League of Nations whether the League gives all the result we would all like to see at once or not. I do not suggest that the Government can do more in that direction than it is doing to-day, but international agreements in regard to War Debts and other matters are fundamental.
The second cause is the uncertainty of our own financial policy. In that connection I venture to say that there is a great deal we can do, and, much as I admire what has been done by the National Government, in many directions, it is, to my mind, the one direction in which they have not advanced as they might have done. I have great hopes of my right hon. Friend the Chancellor of the Exchequer, whose recent speeches in the country together with the answer that was given in the Chamber this afternoon, show quite clearly that he, at any rate, is convinced that there can be no return to the Gold Standard until the conditions which made such a standard possible in the past are reestablished in the world.
I wish I could feel quite certain that those who have the daily management of our currency matters were as convinced of that as is the Chancellor of the Exchequer. I am afraid that there is still grave doubt about the views still held by those who are responsible for the timid and vacillating policy in currency matters imposed upon us immediately after we were forced off gold. That policy, apparently, was based upon the idea that there would be some violent upheaval and that the people of this country would rush away from their own money, and as a consequence the policy of an unnecessarily high bank rate was followed for months. I do not want to labour that fact—it has passed—but I hope that those who are responsible for our currency policy to-day are as convinced as the Chancellor of the Exchequer evidently is, judging from his recent speeches, that there is no chance whatever of the return of this country to any Gold Standard until the conditions which make that standard possible can again be set up. Fortunately, to back up any opinion that may be expressed in this House, we have now the views of the experts of the nations and of those responsible for drawing up the Agenda of the World Economic Conference. If anybody has any doubt as to
the certainty that you cannot return to gold in the near future he has only to read the conditions which they set out as being fundamental before any such restoration can take place.
I do not know whether these matters will be discussed at the World Economic Conference or not. I fear very much, in spite of the conditions laid down, efforts will be made to try and drag this country back to gold before those conditions are fulfilled. We were forced off gold with great and unnecessary expense to the taxpayer when we should have gone off ourselves months before. Leaving that aside, I would say that in this second difficulty—the question of our financial policy—I desire to congratulate the Government upon what they have done, and particularly upon the working of the Exchange Equalisation Account, which, I think, has been of immense benefit to trade in this country. The whole country has benefited since we went on to sterling and our trade has expanded directly as a cause of it. The Government, however, should make clearer than they have done up to now what their financial policy in future is to be, and how they propose and intend to raise wholesale prices. It is the goal to which they have referred over and over again, and quite rightly, as being the principal aim they have in view, in keeping with the rest of the world, but I think they should make it plainer than they have so far done how they propose to set 'about it, and, above all things, they should make it clear that we intend to stick to sterling and that sterling is to be our money as far ahead as we can see at the present time. Since that period to which I have referred—the period of weakness in policy on the part of the Bank of England and the Treasury—I think you have to combine them—we have had a period of cheap money.
One extraordinary thing is to be found in the speeches of many of the great bankers in this country. I think that it is only right to put these things quite plainly. At the annual meetings of some of these banks I read that it is a matter for congratulation that the balances on deposit in the great banks have gone up £200,000,000, and, presumably, equally a matter of congratulation that the advances to industry and trade have gone down £130,000,000. It is not a matter for congratulation at all. To stand at a
table and express satisfaction that the deposits in the banks have grown and to refer to that as being a sign of prosperity appears to me to be only possible on the part of those who have never had anything to do with trade or industry at all. Cheap money has been offered. The reason why the trader does not take that cheap money, and will not accept it, is, first of all, the difficulty of the international situation and the uncertainty in that connection; secondly, owing to the want of a quite definite statement regarding financial and Government policy; and thirdly, because he is absolutely tired of having the Government as a 25 per cent. partner in his industry, taking that share, or a larger one, of his profits but bearing no share of his losses. We are told constantly by Government speakers, bankers, economists and all kinds of people that we are suffering from a lack of confidence. It is true, but the lack of confidence is not something you cannot explain or understand. It is not a psychological phenomenon. It is not something which is going to come right by itself. It is something which we can do a great deal to ensure that it will pass away without very much delay. We can do that, as I have said, in three ways.
I may be told that I have not suggested any definite way in which the Government can set about raising prices. It is hardly usual to expect private Members in this House to put forward definite proposals, but I intend doing so to-day, although I am perfectly well aware that they will not meet with universal acceptance. I say quite frankly, having declared that sterling is not a makeshift but is going to be our money for a long time to come, and making the best progress we can in the settlement of international affairs, such as War Debts and the like, our definite aim should be to consolidate within the Sterling Union, and particularly within the Empire, the exchange rates of the countries concerned on as close a basis as possible. The whole world, and particularly the Sterling Union, is waiting for a lead in this matter. It can be done, and the World Conference should then devote itself to fixing as closely as practicable the basis of exchange between the sterling and gold countries.

Mr. HERBERT WILLIAMS: On a point of Order. I do not want to spoil the speech of the hon. Member. It is very interesting, but it seems to be very remote from the Motion, and there will be no opportunity on the part of hon. Members to reply to arguments from which they dissent.

Mr. SPEAKER: I do not, as a rule, like to interfere with Debates on a private Member's day, but I was just reading the Motion when my attention was called to it. I am bound to say that I do not think that the speech of the hon. Member has anything to do with it.

Sir J. WARDLAW-MILNE: May I draw your attention to the fact, Mr. Speaker, that I am endeavouring to explain the measures which, in my view, will enable the Government to reduce the burden of taxation. May I further point out that the Motion distinctly urges the Government to consider means by which this burden may be lessened. I venture to suggest to you, Sir, that it is useless making statements merely declaring that a reduction in the burden upon industry is essential. Everybody knows that.

Mr. SPEAKER: If the hon. Member leads up to it, it will be all right, but he is taking a long time in doing it.

Sir J. WARDLAW-MILNE: I think that the hon. Member for South Croydon (Mr. H. Williams) should permit me—and I have not taken very long—to develop my argument in my own way, nor do I ask the House for its indulgence as often as he does. I get back, perhaps in a roundabout way from his particular view of the subject, to the means by which this burden may be lightened. I was saying that there are these three causes which directly bear upon the difficulties of carrying on prosperous industry and make it essential that that burden of taxation should be reduced. I have laid stress upon the financial action which the Government should take, because I do not think that you will get any expansion in industry until the points with which I have dealt are dealt with and until traders have some security as to the future in that regard. If anyone suggests any form of reflation in this country we immediately hear talk of the dangers of inflation. We hear that everywhere when any body suggests that prices should be raised by monetary
action. It is true, however, that while retail prices have only dropped half-way clown the hill, wholesale prices have dropped to the bottom. Therefore, before any rise should take place in the level of retail prices there is a long way up the hill for wholesale prices to go.
I should have liked to have dealt further with these matters if the occasion had been appropriate, but in view of the anxiety of my hon. Friend to speak on the burden of taxation, he will perhaps allow me to do something which I would rather not have done, and that is, to give him some little idea of what that burden is and of the difficulties with which industry is faced. On the figures which were ascertained for 1913 it was estimated that the total wealth in this country amounted to something like £16,000,000,000 on the gold basis figure of that date. To-day gold prices are very much the same as they were in 1913, a little lower, and consequently probably that figure is not very far out to-day. Just think of the position of the industrialists in this country if that is our total wealth and the country, that is productive industry, is bearing a burden of mortgage debt equal to 50 per cent. almost of its total wealth. There is no other country in the world bearing such a load. Our total National Debt is greater than that of the United States, France and Belgium put together. It is true that if the conditions under which we were working previous to the War had continued it might even have been possible for this country to bear that debt load, but it is certainly one to-day which makes it almost impossible for industry to prosper.
If we are, therefore, in the position that it is impossible for any Government to reduce its taxation, industry must be very prosperous to carry it. That prosperity could be assisted by inflation which I definitely and clearly recommend. I believe that the country has suffered far more than is fully realised from a long period of deflation and that it is high time we reversed the process. We are told that inflation does not help industry at all. It would raise wholesale prices and by so doing would benefit, not only this country, but the whole world. It is so very easy to talk of the dangers of inflation but that talk has been overdone.
The second way is by economy. Like my hon. Friend I recommend to the Government the official and unofficial reports on possible economies. Those economies, however, cannot immediately meet the situation, and I believe that you could make certain economies by further expenditure in the right direction. Economies are badly needed where we are wasting money. That is the real economy. But there are certain economies which you can make by spending money. For example, you have the case of unemployment pay alone—the enormous payment of £100,000,000 a year for the benefit of those who are unemployed. Anything which could be done to employ them would mean at once that you were making economies by 'spending money.
I want to give to the House something which, at first sight, hon. Members may-say is entirely fantastic, but I will give it to them as an instance of what is in my mind. Why do we not scrap the Navy altogether, and rebuild it, of course within the limits of the most recent agreements with other nations Why not scrap the Navy? All your battleships are 16 or more years old. They will be out of date any way, if they are not so already, before you can replace them. Scrap the Navy gradually and replace these ships by up-to-date vessels, even by a smaller number if you like. You would spend less on upkeep and it would give employment, not only in building, but throughout the heavy trades of this country. It is not so fantastic as it seems at a first glace. I am not suggesting that it should be done out of current revenue, but I do suggest that a loan of a hundred millions for that purpose would enable the Government to save a very large amount of money in other ways. We have two or three capital ships only which are less than 16 years old. I do not pretend to be an export on the Navy, but one does not need to be an expert to know that your battleships which are 16 years old and your cruisers which are 10 years old are getting out of date, and it is doubtful whether it is good economy to go on paying money for the upkeep of vessels so nearly obsolete. It is better to raise a definite loan for the rebuilding of the, Navy within such limits as have been laid down in the various international
agreements and set aside £7,000,000 or £8,000,000 a year for interest and sinking fund.
I hope that in the equipment of the railways, of which we hear so much, the necessity will be considered of providing a big supply of larger capacity wagons and of transferable wagons from road to rail. I think the right hon. Member for Tamworth (Sir A. Steel-Maitland) wrote or spoke about that matter the other day. That is a development in regard to which other parts of the world are setting a very good example to us. There is a great deal that might be done in that direction. In these matters the Government may require to act, but when one comes to consider the question of private enterprise, one is faced with the fact that it does not matter how cheap you make money in the banks the trader will not avail himself of it so long as these immense taxation burdens are upon him, and so long as the State takes such a large share of his profits.
I agree with my hon. Friend who moved the Motion as to the necessity for a reduction in the taxation of beer. There, again, it is not a question of the justice of the case. I do not say that because some hundreds of people, it may be that some of them are ladies, have sent me postcards on the subject. Other hon. Members have also received postcards. If anything would make me disinclined to propose a reduction in' the taxation on beer it is the receipt of these postcards. Some of the writing runs from one line into another and it would appear that the subject was a very vital one at the time in the minds of those who wrote them. From the point of view of mere economic accountancy it is not paying us to tax beer as we do at the present time. I entirely agree that a reduction in this form of taxation is desirable from the working man's point of view, although I do not consider him the only person worth consideration in this connection. The postcards that I have received would lead one to believe that only the working man drinks beer. A great many other people I can assure the writers are interested in the taxation of beer, besides the so-called working man. The increased taxation of beer is not bringing in the expected revenue. It is
causing unemployment, it is causing loss of rates, it is driving a large number of retail traders out of business and it is not doing any good to the State or anyone else. Leaving aside the question of justice and the question of the rights and pleasures of the working man, this is a question that the Chancellor of the Exchequer will no doubt consider very seriously in connection with, future Budgets.
I understand that my right hon. Friend the Lord President of the Council is going to reply. I hope that he will forgive me if I say that the bulk of Members of this House—I say this with no disrespect to the Prime Minister or to any other Member of the Government—are looking to him more than anyone else to give us a lead in putting things in order and in measures to give industry a new opportunity of prosperous working. No one understands and appreciates the position of the traders of this country better than my right hon. Friend, and no Member of the Government understands these problems better than he. Many of us remember the time in 1923 when he took his political courage in his hands in order to bring about a new order of things he considered essential and which is now accepted. His proposals were refused by the people then, but they have now been accepted. Just as the tariffs for which he fought then are forming the backbone of our return to prosperity to-day—[Laughter]—There is no doubt about it. If hon. Members have the slightest doubt about that statement, they. will be able to put their case, if not to-day on some other day and we shall be glad to prove our statements. There is not the slightest doubt, however, that the real proof of success—perhaps this will please some hon. Members better—of our tariff policy will be the bringing about of free trade throughout the world. The extension of fair and freer trade throughout the world will be, I repeat, the greatest proof of the success of that policy.
I want to echo what was said by my hon. Friend who moved the Resolution, that the House has waited very patiently and the country has waited very patiently for action to relieve our present distress. Much I agree has been done but more is wanted. The House will accept almost anything from this Government except
weakness and timidity. It will attempt almost any new scheme that can be brought forward, and will admire and support I believe any proposals, however drastic, if they really deal with the situation. Every one of us, wherever we may sit in the House, wants industry to be restored to prosperity, but that cannot be done except by bold measures, by the Government saying: "We are dealing with exceptional times, times just as exceptional as in the days of war, and these times require exceptional methods. We care nothing about what may be the ordinary practice in normal days."
The idea of suspending the Sinking Fund may appear to those who live in the past as something too horrible to be considered seriously. We must wipe out that idea altogether. Suspend the Sinking Fund, raise the loan of which I have spoken—which, no doubt, will be described later as fantastic—and rebuild the Navy. That cost would be a mere bagatelle. Some £5,000,000, £8,000,000 or £10,000,000 a year would give you your interest and Sinking Fund, and you would save more than that in regard to unemployment benefit. The Government may not accept that idea. I press nothing in detail upon them to-day but I say that the whole country is waiting for a lead from the Government, and in the end it will he judged by what it has done for industry and unemployment and by that test alone.

4.39 p.m.

Mr. COVE: I beg to move, in line 1, to leave out from the word "House," to the end of the Question, and to add instead thereof the words:
 realises that the existing level of taxation is largely due to expenditure on unproductive services, views with anxiety the growing burden of indirect taxation upon the working classes, and will resist any attempt to reduce direct taxation by further economics in the social services.
I should like to congratulate die Mover of the Resolution on the selection of the subject matter and the manner in which he presented his case. I am very much interested in what he said and I am sure the whole House appreciated his argument. I am glad that this subject has been raised, because it gives me an opportunity of stating, perhaps in an imperfect way, the position of the party to which I belong. We believe that it is impossible within the confines of the
capitalist system to give a high standard of living to our people. We believe that out of the present system, in spite of the fact that we have enormous productive capacity, we have not the machinery to distribute that produce amongst the people. The Seconder of the Resolution said that the whole of his party were looking to the Lord President of the Council more than to any other Member of the Government to see that the trade of the country had fair play. He appealed to the right hon. Gentleman to remember the position of the industrialists and the traders of the country.
I want to appeal to the right hon. Gentleman on another score and to ask him to tell us to-night, and also the many thousands of people outside, whether the Government are still maintaining the principle of equality of sacrifice which they evoked during the crisis. At that time the Government stated that the country was in a crisis and all the citizens must make sacrifices towards the recovery of the nation. There were cuts in the pay of the police, the Army, the Navy, and the teachers of round about 10 per cent. The benefit of the unemployed was also cut 10 per cent. I want to ask the right hon. 'Gentleman whether he can reassure me and reassure the unemployed and all the other 'classes that. there will be no relief of direct taxation unless there is also relief of the cut classes, that if the addition to the Income Tax that was put on during the crisis is to be removed then, at the same time, the Government will also remove the cuts that were put upon various people. I hope that the right hon. Gentleman will be able to reassure not only industrialists and traders, but the cut classes who were involved in the principle of equality of sacrifice.
I was much interested in some of the arguments of the Mover and Seconder of the Motion, but I do not think they established their case. I do not think they made it clear that taxation is a burden on industry. It was not made clear to my satisfaction that if we were to remove taxation there would inevitably flow from that fact a revival of trade. As a matter of fact, all the economic opinion that I have been able to consult, including the most exhaustive inquiry that was made in 1925, 1926, and 1927 by the Colwyn Committee, is in the opposite direction. The Colwyn
Committee came to the conclusion that taxation was not a burden upon industry, that direct taxation did not enter into prices, that the producer did not, for instance, charge a price higher because there was a, 5s. Income Tax than when there was a 4s. Income Tax.
I remember the late Chancellor of the Exchequer, Lord Snowden, before he became Chancellor of the Exchequer, making a statement on this subject when he sat on the Opposition benches. He said that taxation was levied after profits had been made. That fact establishes the point that taxation is not a burden on industry, does not enter into prices and does not rob us of our competitive power or interfere with the necessary capital needed for the development of British industry. It was abundantly proved by the Colwyn Committee, in the conditions which then existed, that there was sufficient capital not only to finance industry but to finance a substantial increase in trade, and what was true then is doubly true to-day. If the prosperity of British trade depended on the supply of capital British trade would be prosperous at this moment. The seconder of the Motion pointed out that there were millions of pounds lying idle, rotting. You have this condition to-day, on the one side, you have human labour and human beings rotting under our present system of society and, on the other, capital rotting, wasting, lying idle. There is plenty of capital available for effective investment in industry, and there need be no concern on that point. The Colwyn Committee directed special attention to the fact that public companies were largely financing their own industry out of their own reserves and savings; that the great bulk of the new capital needed was being provided by the companies themselves.
Let me draw attention to this important point. If the case put forward by the hon. member in this Motion has any truth in it, if hon. Members opposite really mean business, there is only one way in which they can relieve the burden of taxation effectively and that is by examining the figures of the Budget and tackling those items which really are costing money. What is the main item of cost in the Budget for 1932–33? It is the gigantic item of the unproductive Debt. Look at it. We have an esti-
mated expenditure of about £760,000,000, and out of that over £300,000,000 is raised for the purpose of paying interest on the National Debt, that is to say, that about 45 per cent. of the taxation raised in the Budget goes to pay the interest on the National Debt. That is just a shifting over from one set of people to another, a re-distribution of the national income of this country. I remember Lord Snowden saying—I am sure be will be accepted by hon. Members opposite except when he talks about tariffs—that the rich classes of this country were not paying for the Army, the Navy or the Social Services, that the wealthier sections of the community were making little or no contribution to the maintenance of the Navy and Army or the Social Services, that their contributions through direct taxation went back into their own pockets in the form of interest on their investments in the National Debt. As a matter of fact, the direct Income-tax payer to-day is not even paying a sum sufficient to pay for the interest which that class is drawing from the War Debt.
The whole burden of the Social Services and the maintenance of the Navy and Army rests upon the shoulders of the working classes, through the medium of indirect taxation; and I say that if you are going to tackle this problem at all you cannot escape the National Debt. You must cut it down, and not merely by conversion loans, for we shall never get rid of it in that way. Let me refer to that famous report which lowered British prestige so much and helped to create the panic and crisis through which we passed last year—the May report. The figures were evidently got out by one of the Departments. An exhaustive and detailed analysis of national expenditure is given in that report, on page 235. They give the total figures of the increase of budgetary expenditure for 1931-32 over 1913-14, and say:
 From the foregoing table, it will be seen that out of a total increase of £633,318,000, no less than £318,498,000, or 60.24 per cent. is on account of Debt, War Pensions, etc., and if there he added the increase in respect of Defence Services £33,334,000 as being generally related to like purposes, the increase is £414,832,000 —namely, 65.50 per cent. of the total increase.
These are staggering figures. They show that 65 per cent. of the budgetary
increase in expenditure for 1931–32 over pre-War is due to the Debt and Defence Services. They go on to say:
 Next in order of increase are the Social Services. To the sum of £99,945,000 there has to be added £12,324,000 increase under grants to local revenues that is £38,324,000 less £26,000,000 for de-rating) showing a total increase of £112,269,000—namely, 17.73 per cent.
Therefore, 65 per cent. of the increase in expenditure in the Budget is due to Debt and War Services and 17 per cent. to Social Services. If the principle of equality of sacrifice is to be applied; if there is to be any equity at all, if you are going to deal with this on principles of sound economy, you must cut down that 65 per cent. burden before you touch the 17 per cent. burden. A reference has been made to the burden of local rates; but in that case there are assets for loans, local authorities have millions of pounds worth of productive assets, houses, electrical works and tramcars, all of them producing wealth now and will produce wealth in the future. But here is an unproductive burden, and a burden behind which there are no real assets at all. This is one of those curious things, an unreal, intangible thing to the extent of £400,000,000 with no assets behind it; waste. It is only real in the sense that it brings in dividends to those who own it. That is the only reality behind it, except of course the reality of the terrible consequences which resulted from the expenditure of the money during the War period.
A reference has already been made to two reports, the Rentoul Report and the Ray Report, and it is suggested that in these reports we have the lines of policy which the Government should follow. What does that mean? It does not mean economy on war Debt but economy on the Social Services. The Mover and Seconder of the Motion did not go into, any detail, they sheltered themselves behind these Reports, but I am sure that the Lord President of the Council will not be much frightened by the Rentoul Report. Everybody ran away from it, and I see a consequence of it sitting on the bench behind the Government. The impression I got was that some people were prepared to say, "We do not mean that; we do not subscribe to every item; we do not want it to be known too thoroughly by the public, but what we
are subscribing to is the cutting down of the services of education and the health services, and, generally speaking, curtailing and crippling the Social Services."
I do not understand finance and currency, but it appears to me that the Mover and Seconder of this Motion put forward two entirely contradictory propositions. They pleaded for inflation, high prices, but at the same time advocated a thorough-going policy of deflation, which is absolutely contradictory, because an economic policy is a policy of deflation, of the curtailnient of spending power. It was said that everything depends on a productive industry. No one disagrees with that, but the health and well-being of productive industry does not begin and end with the production of the commodity. It goes into the realm of selling the commodity. Productive industry must have purchasers; there must be spending power. The health of productive industry depends much more upon the ability of our people to spend than on the need of capital. There are millions of capital lying idle and there are millions of unemployed. No one can say that 16s. 3d. a week will keep a man decently, that it will provide a decent standard of life.
The amazing thing, the tragic thing is that some hon. Members opposite think that 6d. in a. rich man's pocket is far more economic for the nation than 6d. in a working man's pocket. There have been demands for 1s. 6d. off the Income Tax. What for? To rot in the banks? What are you going to do with it when you have it? It may be £30,000,000 or £60,000,000. There are those who say, "It does not matter. Let us have the money, even if it means an unbalanced Budget." The sanctity of a balanced Budget has gone. I ask hon. Members opposite to tell us how that money, if it is saved, can be productively employed. It would weaken our opposition to the Motion if hon. Members could tell us that. The fact of the matter is that they know full well that what they are pleading for to-day is the financial easement of a class of people in the nation at the expense of the health and the physical and mental development of the vast masses of the people. Only 6.35 per cent. of the increase in expenditure is due to education. Education has been
cut down. I have here other figures which to me are extremely important in relation to this Debate. On page 237 of the famous May Committee's Report we have an analysis of the amount that the Budget has taken out of the national income pre-War and 1931–32. The report gives tables in detail and makes this comment:
 It will be seen that the proportion of expenditure to national income has risen from 7.4 per cent. in 1913–14 to 18.93 per cent. in 1929–30, an increase of 11.53 per cent.
So that you have now in the Budget an increased expenditure out of the national income of 11 per cent. over pre-War. See how it is made up. What are the items that cause it? You have gone up from 7 per cent. pre-War to 18 per cent. in 1929–30. Here are some figures:
Debt interest and management, 7.06 per cent.; Sinking Fund, 87 per cent.; War Pensions, 1.36 per cent.; Social Services, 1.41 per cent. The first three items together account for 9.29 per cent. You have had an increase of expenditure in relation to national income of 11 per cent. Of that 11 per cent., 9 per cent. is due to War debt in the main, and 2 per cent. is due to the social services. Take the subject of education. You are spending a lower percentage of the national income on education to-day than you spent pre-War. It is quite evident that if you are going to deal with this question you cannot avoid dealing with the War debt.
I want now to come to one or two other points. I have been interested in finding some figures which would show the relationship of direct Income Tax to unemployment. It has been stated here to-day that a high level of taxation results in a high number of unemployed. There are no facts in existence to bear out that assertion; there is no correlation at all. I have figures here from 1922 up to the present time. Income Tax for a number of years was 4s. Take the years 1926 to 1930. During those years you had a 4s. Income Tax. Look at the unemployment figures. They have varied from quarter to quarter and from year to year. They have changed while Income Tax remained exactly at the same level. Unemployment figures have fluctuated between 19 per cent. and 9 per cent. I agree that there is one relation-
ship between the expenditure of the Budget and unemployment, but it is not the relationship mentioned on the other side to-day. The relationship is this: If you have millions of unemployed you have to tax in order to try to keep them somehow. High taxation is not the direct cause of unemployment, but unemployment is a cause of higher taxation. If you can solve the problem of unemployment you will relieve your budgetary expenditure to that extent.
We believe that it would be a monstrous injustice to relieve the direct taxpayers and forget the "cut classes. It would be a monstrous injustice to take 6d. off the Income Tax and not put that 10 per cent. back for the unemployed. I do not believe that the public conscience of this country would stand it. What you want at the moment is not more capital. That is lying rotting and idle in the banks by millions. What you want to do is to increase the purchasing power of the people. Instead of blowing up the Navy and putting it back, digging a hole and filling it up again, and all that sort of thing, why not scrap your slums? It would be a good thing if you gave enough money to the unemployed to scrap their old clothes and to buy new suits. It would be a sound economic proposition to give money to the children in my division and other divisions so that they could buy the boots they want. That would set the boot factories going. Industry to-day wants greater purchasing power among the people. The party to which I belong has the right policy. It says that the economic health of the nation and the social stability of the people depend in the long run on the standard of remuneration, on the rate of wages they receive, and that employment can be provided only when a higher purchasing power is put into the people's hands.

Mr. LOGAN: I beg formally to second the Amendment.

5.14 p.m.

Sir SAMUEL ROBERTS: I wish first of all heartily to congratulate my colleague in the representation of Sheffield on his good fortune in selecting this subject, and on making a speech of such a calibre as to interest the House and the country—a speech that will be of particular interest to his constituents in
Sheffield when they have an opportunity of reading it to-morrow. The subject of the Motion is one which at the moment arouses the intensest interest. Everyone, except possibly hon. Members opposite, will agree that taxation in any form is bad, but that taxation in some form is necessary. If we agree that taxation in all forms is bad, we can test the various forms of taxation in order to ascertain whether they are excessive or not. There are two tests. Taxation is excessive when it ceases to achieve its purpose and results in a reduction of the revenue produced, and it is bad when the tax is not borne by the people who are intended to be taxed but by the people who produce the commodity that is taxed.
There is, for instance, the case of the Tobacco Duty. That is a tax borne by the consumers of tobacco. As far as we know it is not borne to any grievous extent by those who make or distribute tobacco. On the other hand, the Beer Duty seems at the present time to have all the evils of bad taxation. The revenue from it is going down, and it is not being borne mainly by the people who drink beer but by the people who make and distribute the various corn-modifies from which beer is produced. Again, the Entertainments Duty. It might appear to be perfectly fair, in a way, to tax the person who goes to entertainments. It may be found, for instance, in the case of greyhound tracks that the Entertainments Duty is being paid by people who go there to get entertainment. But it is a bad tax when you come to certain classes of seats in cinemas and certain other classes of entertainment, where it can be definitely proved that the tax is not paid by the people who enjoy the entertainment. The burden in those cases falls upon those who provide the entertainment because the tax becomes a charge upon their gross profits. I think we can get in that way a touchstone whereby it is possible to judge whether or not taxation is excessive and evil.
I do not wish to deal with any of the subjects which have been dealt with already except one mentioned by the Mover of the Amendment. He used the oft-repeated statement of the purist that direct taxation, as such, has no evil effect upon industry, in that it is a tax upon profits, after the profits have been ascer-
tained and therefore does not appear as a charge upon the particular commodity concerned before that commodity is sold. I agree that Income Tax is better from the point of view of industry than rates, because rates are definitely a prior charge on production. But to say that direct taxation is no injury to industry is very far from true. In order to build up a sound business it is necessary to put aside money year by year and accumulate a reserve. Those businesses which have prospered chiefly in the past and which are now able to weather the storm are those which have been able to put aside large sums for development and for meeting the storm when the storm came. At a time when taxation is very high the tax is borne first by the industry before it comes on to the actual taxpayer. It has to be paid out of the company's profits before those who are running the business can see what they will pay in dividends and what they will put to reserve. Those who are conducting a business look to see What they will pay in dividends after they ascertained what is to be paid in taxation. It may be said that you deduct the taxation when you pay the dividend, yet, from the practical point of view, when profits are small you are naturally inclined, first, to pay a reasonable dividend before you put to reserve—

Mr. ANEURIN BEVAN: Is it not the case that before any taxation is paid, the Inland Revenue authorities make allowances in respect of extensions and replacements and matters of that kind?

Sir S. ROBERTS: The Inland Revenue authorities allow a certain amount for depreciation. They do not allow for any depreciation in value on buildings and nothing for extension, nothing for development and nothing for improvement. It is very difficult to get what is called obsolescence allowance.

Mr. COVE: Surely not?

Sir S. ROBERTS: It is very difficult indeed to get any adequate allowance under that head. But hon. Members opposite appear to be trying—though I do not say that they are doing it wilfully —to divert me from pursuing a rather complicated argument and I must try to get back to that argument. As I was saying, when profits are lean and when the question arises as between reserves and dividends, the natural inclination is
to pay a reasonable dividend, taking into account the taxation that will be deducted from what goes into the pockets of the shareholders. The natural inclination is to pay that reasonable dividend before putting anything into reserve. That is one point. Another point is that at the present time when reserves are taxed so heavily, necessarily much less goes to reserve than would be the case if taxation were lower. If only 15s. goes to reserve where 20s. went formerly, then, consequently, the amount of reserves are considerably less than they would otherwise have been and these are the reserves from which all industry must refit and from which all new industrial developments must be produced.
These facts are obvious to anyone with a knowledge of business management, but there is another point which is not quite so obvious. There is the question, not merely of the effect of taxation on profits, but of the effect of taxation on the psychology of the man who is thinking of new developments. That consideration is most important. I mention one instance of which I have heard, and, while I do not know of the case myself, and am not prepared to say that it is true, yet it is a case which sounds likely, because it is in accordance with human nature. It is the case of a dentist who, when the Income Tax was increased at a certain period, ceased to work on Saturdays. He said that he was being taxed so heavily that he was going to enjoy one more half-day off in the week. That is human nature and we all have our human instincts—on this side of the House just as on the other side.
Then consider the case of a man who has thoughts of investing a large sum in a new enterprise. He gets out his plans, specifications and figures and he sees that if he invests that sum in that enterprise it is likely to bring him in 10 per cent. There is of course the risk of the enterprise going wrong. There is no enterprise devoid of risk. He calculates that out of the 10 per cent.,2½ per cent. is going to be taken for Income Tax and possibly another 21 per cent. for Surtax, leaving him a return of only 5 per cent. Such a man will then consider that if he invests that sum of money in some established business—arid at the present time, outside of trustee securities, any wise investor can easily
find a safe investment at 5 per cent.—he will get a return, after deducting taxation, of 2½ per cent. on his money. Thus the only margin between taking the risk of the new enterprise and investing outside his business at 5 per cent., is a margin of 2½ per cent. In those circumstances a great many people would prefer not to have the worry, work, anxiety and risk of going in for some big development for such a small margin. This, I may say, is not an entirely imaginary case. I say nothing more than that.
I have to offer one concrete suggestion. I think we ought to try from our own experience to suggest anything which we think might be helpful, and the matter which I wish to mention deals directly with taxation, because it deals with the question of reserves. I suggest that the Lord President of the Council might consider issuing a bold prospectus to the nation—if you like to call it so—to say that anyone who was willing to start some capital reproductive enterprise and start it now would get certain facilities. Proposals would have to be passed by a committee—which ought not to take too long—and if a scheme is found definitely to be a capital reproductive enterprise, then let it be registered with the Inland Revenue authorities who would allow that man or that firm, out of the profits of that enterprise or other profits of the same concern, to set aside the capital value of that enterprise during the next 10 years over and above ordinary depreciation. I believe there would be such a flood of people coming forward with new enterprises as would very quickly cause a substantial deflation in the numbers of unemployed, and by reducing the number of unemployed as quickly as possible you would be reducing the enormous amount which is now being paid week by week for unemployment benefit. The one main way to keep down future taxation is to reduce the vast expenditure of this country. At the present time our taxation is a grievous burden upon all classes, and we confidently look to the Government to take some steps in regard to it. We are grateful for this opportunity of bringing the matter before the Government and of showing, as humble private Members, how strongly some of us feel on this question. We appreciate the opportunity and we hope for results from it.

5.27 p.m.

Mr. LAMBERT: The speeches delivered for and against this Motion have been of a very high order. I desire to join in the Debate because this is an old subject of mine and I remember some 10 or 12 years ago from the opposite side of the House moving a Motion in favour of rationing Government Departments. I would first offer some observations on the speech of the hon. Member for Aberavon (Mr. Cove). He advocated a policy of equality of sacrifice. He represents, I understand, the National Union of Teachers.

Mr. ANEURIN BEVAN: He represents his constituency.

Mr. LAMBERT: I make no suggestion whatever against the hon. Member, but I understand that he has some special connection with the National Union of Teachers, and he complained about the cut of 10 per cent. made in the teachers' salaries a year ago. Let him come to my constituency among the cultivators of the land and he will find cuts, not of 10 per cent. but of 50 per cent., and if there is to be equality of sacrifice the cultivators of the land are entitled to as much consideration as the teachers. The hon. Member spoke of increased purchasing power. What does that mean 4 It means that the Government are to enable the people to buy more commodities. A very large percentage of those commodities will come from abroad. How can those commodities come from abroad unless something is produced here to pay for them? If you increase purchasing power without increasing production surely hon. Members realise what must be the result.
Then the hon. Member referred to unemployment and said that taxation had nothing to do with unemployment. That theory cannot be maintained in these days. We have got in the world now the highest taxation since the War. We have never had taxation so high as it is in this country now, and we have never had unemployment at so high a level. I do not understand the hon. and learned Member for East Bristol (Sir S. Cripps) smiling. I understand that he is appearing in a case in another place, and if he presents a sound argument like mine there, as I suspect he does in his legal capacity, quite different from what he does in his political capacity, I am not
surprised at his having the admirable record that I understand he has.
I am very glad that this Motion has been moved. I do not wish to condemn the Chancellor of the Exchequer or the Government, because, after all, the Government succeeded to a terrible heritage. It is an appalling problem that the Chancellor of the Exchequer has had to face, and there is no doubt that the Government have restored the credit of the country to such an extent that money is coming here from abroad to be invested. But I do say that unless there is a rise in prices or a reduction of taxation, there must be a default on many of our fixed public charges. The hon. Member said that taxation does not matter at all. I was brought up in the school of Mr. Gladstone, and I am not ashamed of it. In fact, I am an ardent Gladstonian to-day, though I do not know whether there are many of us left. This is what Mr. Gladstone said about taxation:
 It is a characteristic of the mischiefs that arise from financial prodigality that they creep onwards with a noiseless and stealthy step; that they commonly remain unseen and unfelt, until they have reached a magnitude absolutely overwhelming.
That was Mr. Gladstone's dictum, and he was a greater financier than any man in this House, especially any man on the Front Opposition Bench. Under that system of rigorous economy the wage-earning classes increased their prosperity amazingly.

Mr. LANSBURY: indicated dissent.

Mr. LAMBERT: My right hon. Friend the Leader of the Opposition shakes his head. I remember, and he 'does as well as I do, the days in London when there were soup kitchens and all sorts of things, children without boots or shoes, and so on. You do not see that to-day, and the standard of life in this country has increased enormously, but it will go down if taxation continues to be piled up as it is to-day. I feel quite convinced of that.

Mr. LANSBURY: I dissented in regard to wages. Under Mr. Gladstone's great Budgets the wage of an able-bodied workman, with a wife and family, in East London was 17s. or 18s. a week.

Mr. LAMBERT: My right hon. Friend will agree with me that the standard of life as a whole has increased,

Mr. LANSBURY: The right hon. Gentleman was backing up Mr. Glad-stone's greatness.

Mr. LAMBERT: Certainly, because I think Mr. Gladstone was the greatest financier this country has ever produced.

Mr. LANSBURY: He was the greatest —well, never mind.

Mr. LAMBERT: I am very glad to have the Lord President of the Council here, because I am glad that the Conservative party is taking up this question of economy. I always think they have been devoting too much attention to tariffs and too little to taxes. I remember in this House Sir Michael Hicks-Beach, who was a great Conservative statesman, and he was the last man to follow Gladstonian finance. They called him "Black Michael." I believe he had a considerable vocabulary for his colleagues, but I do not suppose that 30 years hence my right hon. Friend the present Chancellor of the Exchequer will be called "Black Neville"; I do not think he is quite so stern. For the past 30 years we have always been spending money to overcome political difficulties. This has got to cease. I have said it here before, and I shall keep on saying it. We had it on Irish land, and I was a Member of the Government that spent a great deal of money on social services and £1,000,000 was voted for the Welsh Church. Then came the War, and since the War we have had an orgy of expenditure.
I have come to the conclusion, which has been fortified by the Debate to-day, that the extension of the franchise in this country has made it impossible for this House to be the guardian of the public purse. The whole system since 1918 has been one of bribing the electors at the taxpayers expense. I am sorry to say it, but there it is, and no longer is the House of Commons the guardian of the public purse. It is always raiding the public purse, and everything which is done here now and demanded in the way of social services, and so on, always means spending more of the taxpayers' money. I think it is a fatal policy. What I am going to suggest may sound strange, coming from an old Liberal, but I am quite convinced that we ought to have a revising Chamber for these questions of finance. It. cannot be the
present Upper Chamber—it must be non-hereditary—but there should be some check upon a Government spending money, particularly at the behest of the House of Commons.
Especially do I say this when I hear the arguments from the other side, which are very powerful, and were put very powerfully, I have no doubt, at Rotherham the other day. There must be a greater check on expenditure. We know that, in this House especially, whatever the Cabinet proposes, we carry. The Cabinet has enormous power. We had an example of it the other day on the Austrian loan, when everyone spoke against it, but it was carried. We know, too, that in the last Parliament, owing to the fear of a Dissolution, we had Land Taxes passed by a combination of Liberals and Socialists. I did not join in that combination, but there it was, and there certainly should be some revision of such combinations and such expenditure.
I have thought this over very carefully, and after a long experience of this House, I have really come to the conclusion that it is essential, if we are to get a reduction of taxation in this country, that there shall be some revising Chamber, in order that Governments of the day shall not have an unlimited right to spend money. There is also such an enormous power in the hands of the Prime Minister. He can always threaten a Dissolution of Parliament. I remember Sir William Harcourt once - saying to me here, "There is nothing that the House of Commons dislikes so much as a General Election." Therefore, naturally, Members of Parliament will vote under pressure for many things for which they would not vote if they were not in fear of a General Election. I do not propose to occupy more of the attention of the House. I have said my say. I think that what I have suggested would be of great advantage, and I press it on the Lord President of the Council, who, after all, is the master of the great legions in this House. The Conservative majority is enormous. Do let him think of this question of a revising Chamber, not only for legislation, but also for finance.

5.40 p.m.

Mr. J. P. MORRIS: The hon. Member for Aberavon (Mr. Cove), who moved
the official Opposition Amendment, in the course of a very imformative speech, upon which, from his point of view, I congratulate him, stated what, to my mind, is a new viewpoint of political philosophy. He stated that the people who pay Income Tax and Super-tax in effect do not pay it at all, in that the interest on the War debt services is returned to them. All that I can say to him is that, among many of my friends, I know it is a fact that on the occasion of their payment of Income Tax last month, and on the two occasions last year, they did not think they were not paying Income Tax, because in many cases they had to have recourse to their banks for an overdraft to meet the demand. The hon. Member also stated that it would be difficult to visualise how, and where, the money could be spent that would be saved by a reduction of 1s. 6d. in the pound in the Income Tax. My reply to that question is that, if such a miracle were possible, the industry of the country would welcome at once all the savings that would be caused by such a reduction, owing to the increased confidence created in industry. Confidence begets confidence, and that added confidence brings out in the English character that innate quality, the spirit of adventure. The spirit of adventure opens out many avenues wherein risk and speculation may play a part and employment be found for our people.
Of all the subjects that one could choose for the purpose of a private Member's Motion, none, in my opinion, is so worthy as that of excessive taxation. No subject compares in importance or gravity with that of the intolerable burden of excessive taxation which. we have in this country at the moment. It is a subject which should command the undivided attention of this House, and I trust that this House will send a message in such terms and with such. an overwhelming vote that at last His Majesty's Government will realise that something real and effective must be done to reduce this intolerable burden of taxation which is crippling our industries to-day. Let us be frank and honest. Let me ask: Has not every Conservative Minister in the National Government promised a reduction of taxation and economy? Was not the word Retrenchment in the battle cry of the old Liberal party? The right hon. Member for South Molton (Mr.
Lambert) proudly said that he was an ardent Gladstonian. It was always a Gladstonian dictum to reduce taxation to the lowest possible limit. I hope, therefore, that the Liberal Members will support this Motion.
All those who supported the National Government at the last election advocated a reduction of taxation. In fact, the party to which I have the honour to belong put the reduction of taxation and economy as a corner-stone of their programme. Did we not buoy up the hopes of the business community that if we were returned to power we would make an effective reduction in taxation and have real economy? I am not unmindful of what the National Government have achieved so far. I know that by the Debt Conversion scheme £23,000,000 has been saved and that in the Budget of last year economies to the extent of 4,79,000,000 were effected, but still Income Tax is 5s. in the £ and more taxes were imposed in the last Budget. This ogre of taxation is destroying the enterprise and confidence of our people. I ask myself why it is that the competitive power of industry has become so impaired since the War. Why is it that from occupying the first place among the nations of the world in the matter of exports we have fallen to third place up to a few months ago? There is only one answer—costs which have been swollen by taxation. Statesmen of a generation ago advocated the lowest possible taxation as the keystone of the archway of industrial prosperity. This country to-day is taxed double and treble compared with its chief competitors. No matter where we look we discover that we are in an unfair competitive position, and never in the history of the world was there such an example as in this country of the dead weight of taxation.
This question is undoubtedly the most important and urgent one before the people of the country. Every economist, industrialist and banker has issued warnings and continues to issue warnings of the dangers confronting us. The leaders of commerce and industry, who have their fingers on the economic pulse of the country, issue similar warnings. I make bold to say that until we effect a real and substantial reduction in taxation there is no possible hope for an improvement in trade or employment.
We must recognise the cardinal fact that excessive taxation impoverishes the home markets and deprives industry and enterprise of the capital which is essential to successful development, the capital which is the life blood of industry, without which it is impossible for it ever to achieve its former prosperity. I am only a back bencher, and I do not wish to be presumptuous, but I would like to warn the House not to be lulled into a false sense of contentment and complacency that all is well. Prosperity is not just round the corner, and it is futile to talk of prosperity while the tax gatherers of the country are draining dry the resources of individuals and of industry. I know that it is all very well talking in this strain and not advocating a remedy, but in the short time at my disposal it is not possible to develop the points that I would like to put before the House.
I do suggest, however, that the Government Departments should be rationed. Lord Oxford, who spent many years at the Treasury, said in 1924 that in his opinion the only possible way of dealing with this question was by rationing the Departments. If it is right to ration the spending departments of a business house, is not that policy worthy of consideration for the spending Departments of the Government? Before the War we had 15 Ministries; now we have 19. The number of employés has increased from 11,000 to 43,000, and the cost of administration from £6,000,000 to £22,000,000. I know that a reduction there would be only a small saving compared with the amount that would be desirable to effect any real improvement, but still it would be a march in the right direction.
The Beer Duty has been referred to to-day. Last year I voted for the Government in the retention of the Beer Duty, because, in my opinion, at that time there was no certainty that we would not have a supplementary Budget, and I did not feel disposed to support legislation for the remission of taxation until it was known for a certainty whether or not the country was out of the wood. To-day, however, the position is very different. From the figures supplied, I find that the revenue from beer is estimated to be £2,000,000 less than in 1931 and over £6,000,000 less than the fore-cast of the Chancellor of the Exchequer
in presenting his Budget. On top of that, of course, there is the loss to the country caused by increased unemployment and the reduced Income Tax due to the reduction in profits of the farmers and malsters. That is a point which the Government ought seriously to consider.
The Government have been placed in possession of the reports of the unofficial and official committees on economy, and I am certain that by a close scrutiny of those reports the Government would find plenty of ways in which to reduce taxation. I appeal to my right hon. Friend the Lord President of the Council to act firmly and courageously, and to reduce taxation to reasonable limits. The one thing that industry needs to-day is room to breathe, and nothing would give more life to it than the knowledge that excessive taxation was to be reduced to reasonable limits. It would restore confidence to industry, and that confidence, by increasing employment, would bring to the Treasury an increased revenue. An increased confidence in industry would bring to the people who are unemployed hope and a better outlook. I 'appeal to the Government to proceed fearlessly with this reform. I am certain that along the line of reduced taxation they will earn for themselves a place in the annals of this country which centuries will never efface, and that they will attract themselves more favour than any of their predecessors have done.

5.56 p.m.

Mr. McENTEE: I would summarise the speech of the hon. Member who moved the Motion in this way:
 Eighteen pence off Income Tax and a penny off beer;
Accept these two suggestions and the dole will disappear.
The hon. Member tolds us that taxation was excessive and that, as a consequence, industry was suffering keenly. He went on to say that not only were the owners of industry suffering but that it affected the poorest of the poor. Then he told the Government how in his opinion taxation ought to be reduced, and his only suggestion seemed to be 1s. 6d, off Income Tax 'and a reduction in the Beer Duty. The only suggestion which I heard from the hon. Member who seconded the Motion was that we should smash up the ships of the Navy and immediately start
re-building. All the arguments of the Mover and Seconder and of those who supported the Motion. were for a reduction of direct taxation. No suggestion of any kind has been made that there should be any reduction in indirect taxation. I have tried to find out the reasons for these suggestions and the source from which they emanate.
I find that the Federation of British Industries have been sending annually to the Government for some years their views as to what ought to be done by the Government. They said that what was needed was a substantial reduction in direct taxation, and in a book, a copy of which every member received, I have no doubt, they went rather carefully into the question of the social and other services and their cost, and put forward suggestions as to how those services should be dealt with and how taxation generally should be handled. A table of figures prepared by the Federation of British Industries in regard to the unemployed is very interesting to me. They stated that in 1931 the rate of benefit for a man and wife and three children was 33s. a week and the rate of benefit for a single man was 17s., and suggested that if those benefits were reduced to correspond to the fall in the cost of living from the peak point to the percentage existing at that time—it was about a year or so ago and I believe the percentage was 23 —the figure of 33s. would be reduced by 46 per cent. and the figure of 1'7s. reduced by 3n per cent. They suggested that the following allowances would be adequate, apparently, or at least all that the country could afford—for a single unemployed man, 11s. 4d., and for a married man with a wife and three children, 17s. 4d.
Those industrialists were asking, and to a large extent they succeeded in inducing, the Government to give them considerable reductions in taxes and in rates. I have in mind arguments advanced by the Federation of British Industries in connection with the De- rating Act. We were told that if the concession of de-rating were made an increase in prosperity would undoubtedly follow. They got the concession, and I have figures here which show that very considerable reductions were made in rates—which would benefit them to exactly the same extent as the reductions
in taxation which they are now advocating. The figures are an estimate, it is true, but they are as accurate as such estimates can be. The engineering trades, including marine engineering, benefited by de-rating to the extent of more than £2,000,000, shipbuilding by £400,000, the chemical trades by £600,000, the coal industry by £3,100,000, and the cotton and spinning trade by £1,500,000.
Some 11 or 12 industries, the principal ones in the country, got relief approximating to £17,000,000. That ought to have been a very considerable help to industry, but will anybody dare to say that there is any evidence of prosperity having come to industry in consequence? Everyone who knows anything about it will agree that all those payments to the owners of industry have simply been used to enable them to live a more luxurious life. No Member of this House can show me any evidence of any increase in prosperity in any industry as a consequence of the derating proposals. The main proposal of the Mover of the Motion is a reduction of 1s. 6d. in the Income Tax. The Mover of the Amendment, in an effective and brilliant speech, put a question to the Government which I would like to reinforce: "What can be done by the people who benefit as a consequence of a reduction of the Income Tax by 1s. 6d. or any other sum which can in any way lead to greater prosperity? No answer has been given to that question, and I venture to say no answer will be given. As the Mover of the Amendment said, "Is there really any shortage of capital in industry?" If there were, it might be a legitimate argument to say that a reduction of Income Tax would enable capital to be provided, but every hon. Member knows that so far from there being a shortage of capital there is a surplus.

Mr. HOWARD: What about the Cunarder?

Mr. McENTEE: The hon. Member had better ask those who are on the Treasury Bench. That is hardly a question to be put to me. There is plenty of money for a dozen Cunarders, for 100 Cunarders, in fact, for 1,000 Cunarders. I am not exaggerating when I say there is sufficient idle capital in this country to build 1,000 Cunarders. The seconder of the Motion suggested that, the Navy should
be scrapped. He said every ship in it should be broken up and rebuilt. It will take a good few Cunarders to equal the Royal Navy, and I think the hon. Member who interrupted me had better meet the seconder of the Motion, in the Library or somewhere else, and settle whether the scrapping of the Navy or the building of two Cunarders is of the more importance to the unemployed and industry. I have been pointing out that there has been no sign of increased prosperity having followed derating, although it was a considerable financial concession to industry. When they were advocating derating the industrial magnates of the Federation of British Industries told us that it would lead to a great increase in prosperity. In reality that has not been brought about; derating has been followed by a far greater depression in industry than existed previously. But the causes are very much deeper.
I would like to say a word or two with regard to direct and indirect taxation, because, in view of the statistics we have, it is interesting to note that we should be asked still further to reduce direct taxation. It could only be done—other things remaining the same, as they are likely to do—by a further increase in indirect taxation. In one year the proportions between direct and indirect taxation have undergone a very remarkable change. In 1931–32 indirect taxation represented 34.12 per cent. and direct taxation 65.88 per cent. Between 1931–32 and 1932–33 the percentage of indirect taxation rose from 34.12 to 39.06, and the percentage of direct taxation fell from 65.88 to 60.94. In that one year the people who paid direct taxation, who are generally the people represented by hon. Members opposite, did very well indeed in their efforts to shift the burden of taxation from their own shoulders on to the shoulders of the people who, in the main, pay indirect taxation. How have they done it? I do not want to weary the House with a statement of how it has been done, because everyone knows that it is not an easy explanation to give, and it would take more time than the House would like to give me in which to deal with it, but these figures have occurred to me in connection with the figures I have just given. In 1931–32 indirect taxation represented, roughly speaking, £1 and direct taxation £2—
broadly speaking, one was double the amount of the other—whereas in 1932-33 £1 of indirect taxation is represented by £1 10s.
How is that change reflected in the every-day life of the people? The social services have been ruthlessly cut down, taxes have been increased on almost everything that the average poor citizen uses. Hundreds of things have been scheduled for taxation, and as a result the poor are more heavily taxed and the rich are more lightly taxed. Now we are being asked for further relief for industry, though not one word has been said by any speaker who is in favour of this Motion to show how industry could be relieved to the benefit of the people generally. It is true that the Mover of the Motion said the poor would benefit, but he gave no evidence in support of that assertion; he just made the statement and expected us to accept it on his assertion. All the evidence is against it, because de-rating which was a reduction in local taxation—but, all the same, taxation—did not lead to greater prosperity but to a greater lack of prosperity.
In regard to the Beer Duty, let me say frankly that if we were considering the taxes which have to be imposed on different industries it would be my personal view, though I am speaking as a total abstainer, and as one who has no interest in and no great love for the beer industry, that there is a measure of injustice in the tax imposed on that industry at the present time. The beer industry is doing very well, in spite of all that may be said to the contrary. I have a set of figures with me taken from the "Economist" dealing with the beer industry, among other trades. I do not know that it matters about reading all the figures, but I notice that the dividends paid in the industry as a whole, during the past seven or eight years, have varied between 17 per cent. and 14.7 per cent.
If those figures are right they prove, I suggest, that the industry is well able to stand a good deal in the way of a reduction of beer prices before the workman, who is generally supposed by hon. Members in this House to be in want of beer—[Interruption]—well, it is not general, but fairly general—the industry would stand a reduction of beer prices, if such a reduction were necessary, and
still would be able to pay fairly good dividends. I am not very much concerned about that, because it is a matter of minor importance. I am concerned that any reduction made in taxation should be made in a way that will benefit the indirect taxpayer, and that if there is any increase in taxation, the direct taxpayer ought to pay and not the indirect taxpayer. The indirect taxpayer has been compelled during the last year, and for a number of years, to pay taxation very much in excess of his capacity to pay.
If a vote is taken to-night on this Motion, I have not a shadow of doubt that we shall be beaten by people with interests to serve. Many of them are advocating here the policy of the Federation of British Industries, from whose requests to the Government I have a quotation. The Financial Secretary to the Treasury will know all about that. I have no doubt that he has had an opportunity of reading these communications as they have from time to time been sent to the Government. The Government are fairly subservient to that set of interests, which are able to dictate policy to the Government. The Government pay far more attention to those interests than to the majority of the people who vote for them at General Elections or at any other elections. They arc far more influenced by the class of people who form the Federation of British Industries.
No argument has been put forward—none could be put forward, because there is no such argument—to prove that a reduction of taxation would benefit industry to the extent of increasing trade or of increasing the number of workers engaged in any trade. As a matter of fact, it was stated by the Mover of the Amendment that the arguments and the figures are against it. The reports of committees and commissions set up by the Government are also against it. There is no possible argument that you could put forward that could induce anybody, except an interested party, to vote in favour of a further reduction in taxation that would in no way benefit industry but would benefit industrialists personally, enabling them to live a more comfortable life and to enjoy more of the luxuries, which many of them enjoy almost to superfluity to-day. There is not a shadow of proof that any such
reduction as is advocated in the Motion would be of the slightest benefit to the great mass of the people, to whom I adhere, for whom I speak and whose opinions I desire to voice in this House.

6.20 p.m.

Mr. NALL-CAIN: Before discussing the Motion, I would like to say a word or two about the speech made by the hon. Member for West Walthamstow (Mr. McEntee). He said that a reduction of taxation would not benefit industry. If one starts from the idea that there is only a certain amount of money in the country, if the Government take that money the individual cannot spend it on a great many things. If the individual spends it on extra boots, it is obvious that that must help the boot industry. If there is more money in circulation, industry is helped and more people are put into employment and made better off. We are all in favour of doing anything that will help industry and help more people to get employment and wages. When wages are better, there is more money in circulation, and this country is more prosperous.
I would now like to turn to the subject of the Death Duties. I expect that the Opposition will agree with me, not on the subject of Death Duties, but on the subject of spending capital as income. If a Budget takes £80,000,000 a year as capital and spends it as income, that is not a good thing. Signor Mussolini can be taken as an example of a man who has made his country more prosperous. One of the first things that he did was to do away with Death Duties. All Death Duties are very bad. Some people think that if the money from Death Duties is used to reduce the capital Debt of the country that is all right. I have heard it said this afternoon that the Sinking Fund ought to be done away with; if that is so, the Death Duties ought to be done away with also. I do not think that the use of Death Duties to pay the capital Debt of the country makes any difference to the people who pay those Duties. Money goes out of the country, and gets spent as income, and that is bad.
I want to say a, few words about Death Duties upon agricultural land. It may sound like an Irishism to say that agriculture is the greatest industry in this country. When Death Duties are imposed
upon agricultural land, that industry is deprived of capital which is more necessary at this time than it ever was. Agricultural properties have to pay, perhaps 20 per cent. or 30 per cent. in Death Duties. The land is being sold, and the farmer is having to buy his own farm. He therefore uses up capital which he ought to employ on his farm. If he cannot find capital, he has to borrow it and to pay a much larger sum in mortgage interest than he did in rent. The Opposition will probably agree with us that the best system of farming is that of a tenant under a landlord, but the Opposition think that the landlord should be the nation, while we think that the landlord should be an individual. It is bad for the farmers in this country to have to buy their own land. Death Duties on land are paid on what might be called the amenity or market value. The assessment is not the same as it is in the case of shares. I know estates that produce no income, or even an annual liability, and yet Death Duties are paid on those estates. The duties are very often considerable.
It is of no use expecting the Government this year, unless they are to unbalance the Budget, to make very large reductions in taxation, but I think that the Mover of this Motion was right when he said that he would take a risk. The risk would be justified. If the Government treated the budgetary position by looking at it in relation to a period of three years, which is until the life of the present Government is over, they would do much better than merely looking at each year as a sort of water-tight compartment. If they took a risk this year I think that they would be repaid. The yield of Death Duties on agricultural land at the present time is not very big; I think it is about £1,700,000, and I suggest to the Chancellor of the Exchequer that if he could see his way to do away with that tax, to reduce the rate of it, or to alter the method of assessment and assess land in the same way as shares, he would be doing a very great thing for the agriculture of this country.
I want to talk about another matter, especially as the hon. Member for West Walthamstow has said that it is a pity that hon. Members who were interested in certain matters talked about them in this House. Some of my personal friends are aware that I happen to be interested
in brewing. I am not ashamed of it, except for the reason that the brewing trade is not paying as well as it did. The hon. Member gave a few figures, in the course of which he said that the interest on capital in the brewing industry is 17 per cent., or 14 per cent. He may not have gone into the question that before the War the capital of certain breweries was £1 per share, and that those breweries have reduced their capital to 9d. per share. If 14 per cent. is paid upon ninepenny shares I think the hon. Member might find that the return upon the capital is not very much. Before dogmatising on the capital of any industry, one should look right into the matter and find out what the original capital was and what the losses were, and every other point connected with the matter.
Let me say five things about the brewing trade, not from the point of view either of the industry or of the consumer, but from the point of view of the Revenue. In the last seven years, up to the end of this year, the estimates for the Revenue from beer had been £29,000,000 more than was received. I am not in any way blaming the Treasury, because it is a fact that consumption has been going down. This year the estimate is £80,000,000, and it looks as if the result will be £6,000,000 down on that. It is only fair to say that the reason for the decrease is that most of the beer sold is not good enough. Another reason is that it is not value for money. You cannot expect a workman or anyone else to go on buying something which is not good value. Taxation being as high as it is, it is good policy for the Government to look into the situation and to try to preserve what Revenue they get now, and what Revenue they may get in the course of a few years. When a patient is bad, a stimulant is needed. I am certain if the Government take that course that they will be repaid. Let the Government inspire the people with faith in the future, and in the years to come historians will look back and say that the Budget of Great Britain for 1933 was a turning point in the prosperity of the world.

6.30 p.m.

Mr. DINGLE FOOT: This Motion is couched in terms to which very few of us would take any exception, but, during the
short time that I have been a Member of the House, I have discovered that what matters about a private Member's Motion of this kind is not so much what is said by it as what it implies, and that very often a Resolution couched in the mildest and most non-controversial terms is used by the Mover as 'a peg on which to hang most controversial proposals. That is what has happened in the Debate this afternoon. May I briefly remind the House of the proposals which the Mover of the Motion made? He suggested that the Sinking Fund should be suspended, and he calculated that that would give us £32,000,000. He then said that it would not matter if in the first year we were down on our national accounts by £50,000,000 or £60,000,000—that that need not perturb us too much; and, as far as I could follow his argument, his suggestion was that we should use the money gained in this way for two purposes, and for two purposes only—firstly, for some remission of the Beer Duty, and, secondly, and far more important, for a remission of Income Tax in the neighbourhood of 1s. 6d. in the pound.
I want to join with the hon. Member for Aberavon (Mr. Cove) and others who have spoken—most of them from the Opposition benches—in protesting against any proposal of that kind. It is a proposal which did not emanate in the first place from the hon. Member for Central Sheffield (Mr. Boulton), but was advanced a few days ago by the right hon. Gentleman the Member for Hillhead (Sir R. Horne) in a letter to the "Times," and it had some support, I think, in a leading article in the "Times." We have travelled a very long way since the last General Election if we are going to listen to proposals of that kind in this House. May I remind the House of what happened in the period August-October, 1931? We were told that heavy sacrifices must be required from every section of the community, and heavy sacrifices were, in fact, exacted from every section of the community. There was the increase in the standard rate of Income Tax; there were the cuts in the pay of the Services, the teachers and the police; but, in my view—personally, I have never used the expression "equality of sacrifice"—relatively much the heaviest sacrifice was demanded from the unemployed. The National Government imposed those burdens and made those cuts before the
General Election, and then it went to the country and asked for an endorsement of them. It won the most remarkable victory, as I think, in modern political history, because, of all the millions of people who voted for the National Government, practically every one was going to be poorer as a result of the policy which that Government had already introduced and carried through. As I have said, it was, perhaps, the most remarkable verdict in our political history.
Why were those sacrifices made? Why was it that even the unemployed themselves in large numbers consented to the cut that was made in the very small amount that they received from week to week'' They consented to it because of the argument put forward that above all things, if we were to retain our financial stability, we must have a balanced Budget, and the central argument on which the National Government was returned at the last General Election was the argument of the supreme necessity of balancing the national accounts. The unemployed and the others accepted the cuts on the basis that the Budget had to be balanced. Now the right hon. Gentleman the Member for Hillhead and the hon. Member who moved this Motion come along and say, "Undo what was done in 1931; unbalance your Budget; it does not matter any longer about having a balanced Budget; unbalance your national accounts, not in order to restore those cuts, but for the sole and exclusive benefit of the direct taxpayer."

HON. MEMBERS: No!

Mr. BOULTON: I do not wish to interrupt the hon. Member, but he is misconstruing, perhaps unintentionally, what I said. My words were: "The balancing of the Budget requires no stressing."

Mr. FOOT: It will be within the recollection of the House that the hon. Member went on to say that, even if in the first year of his scheme the national accounts were down by some £50,000,000 or £60,000,000, that need not perturb us too much; and, if that does not mean unbalancing the Budget, I personally do not understand what it does mean. I say that the whole trend of the hon. Member's remarks in moving the Motion was that it was worth while to take a risk—I think that that was his phrase—and, tem-
porarily at any rate, to unbalance the Budget. No one disputes the burden of indirect taxation. I myself speak an an Income Tax payer, at any rate in a small way, and none of us in this House is likely to dispute how heavy a burden direct taxation is. But if it is possible—I do not know if it will be possible, but if by any means it is possible—in the Budget of this year, to give any form of relief, I feel that the first claim on that relief should go, not to the direct taxpayer, however heavy his burden may be, and not even to those other classes who suffered very severe cuts, but that the first claim on any relief that it may be possible to give should be the claim of the unemployed.
Supposing that it were possible to spare even some £5,000,000 or £6,000,000, that, at a rough estimate would enable the standard rate of unemployment benefit to be raised from 15s. 3d. to something in the neighbourhood of 16s. The Mover of the Motion said that we needed an increased circulation of blood in the body politic, and that we needed increased purchasing power in the hands of the people. The remission of direct taxation may or may not increase purchasing power. The money may be put into the bank; some direct taxpayers may even spend it abroad; but, if it is possible to give relief, to however small an extent, to the unemployed, it is quite certain that every penny of that relief will go in increased purchasing power, and that every penny of it will be spent to the very best advantage. I am not for a moment opposing the idea of diminishing, when it is possible to do so, the burden of direct taxation. I think that all of us, even hon. Members on the Opposition Benches, realise how heavy that burden has become. But I feel that, even though most of us in this House may be direct taxpayers, we realise that the heaviest sacrifice of all was demanded from the unemployed, and I think that, if and when it is possible for any relief to be given from the arduous burdens imposed in 1931, the claim of the unemployed should be paramount.

6.37 p.m.

Viscount CRANBORNE: We have before us this afternoon a Motion in favour of reduced expenditure, and an Amendment has been moved, with very
great ability, if I may say so, by the hon. Member for Aberavon (Mr. Cove), repudiating that proposal. It is on the Amendment that I should like to speak. The hon. Member was not merely destructive in what he said; he had a remedy; and his remedy, as I understood it, was that we should maintain Government expenditure and, if possible, increase it, raising taxation, if that were required, in order to put more purchasing power in the hands of the unemployed. That is what I took the hon. Member to say, and I think it is a fair account of what he said.
This is not a new remedy. I have only had the honour of being in this House for two years, but I have heard the same remedy put forward by hon. Members opposite a great many times, and, indeed, they put it into force during the two years for which they were in office. They spent, if I remember rightly, about £100,000,000 on relief schemes for the unemployed. They did that with the very best intentions, but, as the Chancellor of the Exchequer pointed out last week, the only result was to raise the number of people unemployed by 1,600,000. I do not want to overstate the case. It is obvious that that was not the only cause, but we on this side of the House believe that it was a material cause. I believe that a main cause of that increase was that increasing expenditure and taxation struck a very great blow at confidence. The hon. Member for Aberavon said that he had never heard any direct evidence that taxation influenced employment. I would like to quote a few words from the Final Report of the Balfour Committee on Trade and Industry. The report states, on page 248, that:
 While the Income Tax, being a charge on profits, is not in the main a burden on industrial costs, nevertheless a high rate of taxation has very serious effects on competitive power, both by diminishing the fund out of which the hulk of the national savings are accumulated, and extensions and improvements of industrial plant provided and also by discouraging enterprise and initiative.
I know that hon. Members opposite do not hold that view. One of the first speeches that I heard after I came into this House was a speech by a right hon. Gentleman who was at that time their Leader, and who is now Lord Snowden. I remember that he said at that time that saving was a question of individual
habit; and he went on to explain that in his opinion, once a man had got the habit, nothing would make him alter it. Of course, that is perfectly true with regard to an individual. We all know that there are people who are more apt to save, and people who are more apt to spend. But, nationally, there is obviously a great deal more in it than that. Saving on the part of the nation is undoubtedly dependent on another condition, and that is the condition of security. People put by money for a rainy day, as we say, and they only put it by because they feel that it will be there when the rainy day comes. That is why there is very much more investment in civilised countries than there is in uncivilised countries, because in the former the security is greater. Decrease the security, and you decrease the incentive to save and produce. I know that hon. Members opposite do not hold that view. I remember that when I heard Lord Snowden's speech it reminded me of a very old fable about a man who said that he could teach his horse to live upon nothing. Every day he gave it just a little less and less food, until at last the day came when he was to give it nothing at all. On that day, however, by an unfortunate accident the horse died, and, therefore, as he explained to his friends, he would never know whether he had been right or wrong. If you substitute the word "enterprise" for horse, "and" profits "for" food, "you will get a very near analogy. Hon. Gentlemen opposite thought two years ago that they could get industry and enterprise to live upon nothing. But the horse, willing though it was, pined away and died. That is one of the main causes why we have reached the situation in which we are today.
The principle underlying the policy put forward by the hon. Member for Aberavon is, as I understand it, that he proposes to re-distribute wealth by means of taxation, and increase the consuming power of the poor. All that one can say is that that policy has been tried, and has disastrously failed. The money has been spent, taxation has been increased, and the number of people unemployed is far greater to-day than it was before. It is really impossible for hon. Gentlemen opposite to argue any more that, when taxation is imposed upon a rich
man, he alone pays it. What happens in practice, when an employer is very heavily taxed? He knows that, if he makes a profit, the vast proportion of it will go to the State and, if he makes a loss, he will have to bear it himself. Therefore, if he is making a loss, he limits it in the only way he can, and that is by closing his works. Who suffers? It may be said that he suffers because he does not make a profit; but the only persons who really suffer are his work-people, because they are reduced from good wages of 40s. or 50s. or 60s. to the dole. I am certain that hon. Members opposite put their policy forward with the highest motives. But it is not really a policy of economy. It is a sentimental policy. From the point of view of the social services themselves I believe a reduction in taxation is desirable. For the Government has no money of its own. All the money it has comes from productive industry. And, if industry cannot produce at a profit, there will be no social services at all or, at least, they will have to be very greatly reduced. The hon. Member who spoke last said that relief ought to be given first of all to the unemployed. I believe that first of all relief ought to be given to the country and, if the country gets relief, everyone in the country will benefit.

6.46 p.m.

Mr. DENMAN: I should like to put a rather different point of view from those which have hitherto been put before the House because, unlike most Members, I do not really endorse either the Motion or the Amendment. It seems to me that they both stress points which are not of real importance and call attention to rather secondary things. The Motion itself is one of gloom and despondency. Both the Mover and the Seconder implored the Government to show courage, and not timidity. I think their Motion shows a lack of courage. The sort of Motion that I should have liked the House to accept would be:
 The House views with satisfaction the financial strength of the country, will support the Government in maintaining a balanced Budget, and looks to the Government to assist in lightening the burden of industry by a policy of gradual and limited price raising.
The House surely ought to realise and feel immense pleasure in what the Government have achieved and the amazing
financial strength that we have attained. We have had this combined position of high taxation coupled with the maintenance of social services, though not at the height or the standard that we should have liked—straitened but not strangled. We are maintaining them at the cost of high taxation, and at the same time we have a financial position of unrivalled strength throughout the world. I would ask anybody in the House who has any responsibility for running a business concern, Is there any country in the world to which he would prefer to transfer his business? There are plenty of countries with lower taxation, if he wants lower taxation. What he will not find anywhere in the world is a country which has succeeded, by imposing high taxation, in maintaining the level of social services and maintaining a position of confidence and financial strength. Industries have been strengthened enormously by the appreciation of reserves which has resulted from the Chancellor's Conversion scheme. Company after company has almost been pulled out of the mire by having its reserves so strengthened. Is not that a thing for which to be grateful? When we get these rather airy and light-hearted suggestions for dreamy and speculative finance, casting away big blocks of our revenue, I submit that we ought to reject those alluring schemes and be content to accept such taxation as is necessary to maintain the financial stability of the country. The whole basis of our industrial prosperity depends on the knowledge of the whole world that we are essentially financially sound. That gives a basis of confidence, and on that basis alone we shall rise in time to prosperity.

6.51 p.m.

The LORD PRESIDENT of the COUNCIL (Mr. Baldwin): It is not without interest to reflect that a very well-known Member of Parliament of the name of Hume, 111 years ago, moved as an Amendment to the Address:
 That we cannot but express most respectfully to His Majesty our opinion, that an excessive taxation, disproportionate to the reduced value of all property, is a principal cause of those distresses; and humbly to intreat that he will be graciously pleased immediately to direct such reductions in every branch of our expenditure, from the highest to the lowest department,
as shall enable us forthwith to relieve His Majesty's faithful people from a large portion of that burthen of taxation, which, in their present impoverished condition, presses so heavily upon all classes.
History repeats itself and, as this country extricated itself from the difficulties that existed at the time when Hume moved that Amendment, so I trust and believe that with perseverance we shall extricate ourselves from the difficulty in which we find ourselves to-day. I must apologise to the House for taking the place of the Chancellor of the Exchequer, who is the proper Minister to deal with a Debate of this kind. He had an old engagement to speak to-night in the country, and the House knows how difficult it is to get out of those engagements when once made. But perhaps it is a little easier for me, not being Chancellor, to speak on this subject, because it really is impossible for a Chancellor to speak with any freedom on a question of this kind when the shadow of the Budget is already hanging over his head. I have had some experience in taking part in these Debates, now many years ago, and though there is little that one can say, for the same reason that the Chancellor himself would be found rather fettered, I hope I may be able, by commenting on and perhaps criticising some of the observations which have been made, to make my contribution before we decide whether or not we will adopt the Motion before the House.
I should like to begin by congratulating most warmly the Members of my own party who, at great sacrifice to themselves, have put in so much work on that most difficult subject of examining what economies were and were not possible in the expenditure of the country. Their investigation has been of great service and on one or two points the Government have already adopted their suggestions —the abolition of the housing subsidy, for instance—and I can assure them that the Chancellor is examining with sympathy and with care the suggestions that have been put forward. I do not know whether there is any truth in it—all kinds of rumours reach me in my position as Lord President—but I have heard that some of those who have advocated various economies were a little less enthusiastic in desiring to see them pursued than they have been when they first advocated them.
First of all, let me say a word about the speech of my hon. Friend who moved the Motion. I thought both: the quality and the temper of his speech were admirable, and I listened with much interest to what he had to say. He began by saying he wanted to see on the part of the Government a wide outlook and elasticity of mind. Those are two qualities which I have always flattered myself I am not without. He spoke of one subject the idea of which has been advocated in many quarters, that is, a planned Budget over a term of years. I have no doubt that, when my right hon. Friend considers his Budget, he will not fail to give his attention to every suggestion that has been made to make his task less difficult than it would naturally be. My hon. Friend went on to speak of the way in which Income Tax affects the competitive power of this country. That being a subject which interests me very much, as having been at the Treasury at the time when the Income Tax was raised from what we used to consider a normal figure to the height at which it stands today, there are one or two observations that I should like to make, first of all perhaps in the way of comfort. It is quite impossible, I believe, to calculate by any process open to us what the real relative weight of direct taxation is on the industry of one country and another, because we have no reliable data of the proportion of the total taxation in this country to the total wealth and total income of this country—those are very relevant factors—or, indeed, to the comparative distribution of both wealth and income in other countries. You have also to reckon as permanent factors the general character of the industries in each, country.
Remember that we are the first country to apply our direct taxation, at enormous figures, to the balancing of our Budget. No other country has approached us in what we have done in that direction, but it is certain that other countries will have to follow us in some form of taxation or leave their Budgets unbalanced, and unbalanced Budgets over a, term of years mean bankruptcy. Until the time comes that we are all on a level in that work and have balanced Budgets, we have another reason for knowing that we cannot really assess the real relative position of ourselves and other countries
with regard to the incidence of Income Tax. It does not in the least follow that Income Tax is not, in the words of the Motion, an intolerable burden. So much has been said by the Chancellor of the Exchequer himself. I know, as every Member of this House knows, that, theoretically, Income Tax is not a charge on industry, but I heard an interesting quotation given by my Noble Friend the Member for Dorsetshire (Viscount Gran-borne) which he took from the Report of the Balfour Committee. I agree entirely with what was said there. There is no doubt very high Income Tax, plus Surtax and Death Duties, all at exorbitant rates, does lower the level of the pool of savings for investment of the country. There is also the psychological effect when trade is bad. The collection of so large a part of income, for the purposes of the Government, depresses very heavily—and far more than would be the case if trade were good—all those on whose skill, brain and energy the satisfactory conduct of business depends. I think anyone who has experience, or knowledge, will agree that, theoretically, whatever may be said about the incidence of Income Tax, there is no doubt that, except in the best of times, it does act as a great burden on the industry of the country.
My hon. Friend mentioned one subject, which was mentioned by a great many other Members, namely, beer. I should like to pay tribute to the altruistic question, propounded by that warm heart we all know he has, of the hon. Member for West Ham (Mr. Thorne), who was so worried because at Streatham it was impossible to get a half-pint measure. No half-pint measure would have any interest to him. I sympathise very deeply with what has been said about beer, but I think that, in the rather judicial view I am trying to give in this Debate, I ought perhaps just to put one consideration which is sometimes overlooked. I know the argument about the Beer Duty with regard to unemployment —unemployment both in the industry and in agriculture. They are weighty arguments undoubtedly, and must be considered. But there is one argument which is used—that lowering of the tax would be necessarily followed by such a large increase of consumption that the loss to the revenue would be negligible. We
have had many disappointments in similar respects. There is no doubt that the habit of beer drinking, for good or evil—very likely caused in the first instance by high war taxation—has changed in this country. The money which used to be spent on beer is now largely spent on other things.
I said there were similar cases. I look back a few years to the last time when I was in the Government. We brought in, just as the close of our term, a Measure which we all hoped would be of great benefit to the country—the Measure for rating relief. We hoped, and believed, that it would have a really stimulating effect on the railway services of this country. It may be that we did not realise the way in which the railway habit has been changing in this country. People are taking themselves, and their goods, more and more to the roads. Of course, the result was a terrible falling off and depression in traffic. The fact remains that a most substantial help, which was meant to be a stimulus, failed completely to save this falling traffic which is now causing such anxiety to so many people in this country. This point might be borne in mind. I do not commit myself either way, and it would be most unfair to give any views of my own at this moment, when the Chancellor of the Exchequer has that most difficult task, envied by no one in this House, of getting his Budget ready in the next few weeks.
The question which has been raised in many quarters was also raised by an hon. Member—the suspension of the Sinking Fund. That again is a subject which, of course, will be examined and every relevant factor will be borne in mind. I would like to say something in this connection, which I can do without betraying any secrets. Everyone seems to speak as though there was going to be a large surplus. There may be; I do not know. I know just as well, no better and no worse, than every other Member. Every Member who has an income of any kind from invested funds whether small, medium, or large, will agree that, never has he known so many cases where his income has been reduced, or where dividends have failed to be paid at all as in this last year. He knows perfectly well that that will be reflected directly in terms of Inland Revenue. I have,
purposely, not looked at any figures, but I cannot see how, until there is a real improvement in trade, you are going to get any improvement in the figures of what has been for so long, and is to-day, the real standby of the Inland Revenue returns.
My hon. Friend who sits for a constituency adjoining my own—he had the satisfaction of winning a seat which I was unable to win many years ago—was much bolder. He began what looked like being a very interesting discussion on the raising of prices, but I think it dawned on him that that is a subject of discussion next Wednesday. Then he spoke of three measures which might help the Budget. One was inflation, on which I certainly do not propose to embark to-day. The second was economy, with which we all agree. The third was useful work. He mentioned wagons, which I remember being mentioned some time ago. It is very interesting to know that the Great Western Railway have placed, or are on the point of placing, a very large order for 20-ton wagons, and, if that be successful, as I hope and believe it will, then we may see that example followed in many parts of the country. I think he put his finger on a very practical spot there. I think that large-wagon building for commercial purposes is one of the directions in which we may look with some moderate hopes. Frankly, although I do not wish to betray any confidence, the Chancellor of the Exchequer has not yet considered the rebuilding of the Navy. If he returns in safety from Derby, I will tell him of the scheme, and I have no doubt he will give it his most careful consideration.
The hon. Member for Aberavon (Mr. Cove) has a gift which has been denied to me. He can whip himself in two or three minutes into a fervent enthusiasm about anything. I listened with much interest to what he said, but I was rather puzzled by some of the figures he gave about percentages. I do not want to deal with figures, and I do not want to give more than one minute to this matter. I only wish to refer to the matter, because, unintentionally on his part, for a short time he misled me, and he may have misled other Members of the House. The figures he quoted were taken from the Minority report on National Expenditure and the percentages were the percentages of increase.

Mr. COVE: That is what I said.

Mr. BALDWIN: It was difficult to follow. When you are told that the increase since the War was only 15 per cent. for the social services, it does not make you realise the actual fact that the social services have risen since 1913 from about £14,000,000 a year to £100,000,000 a year. I just wanted to mention that in case other hon. Members had been misled. I was very much surprised at the percentage, and did not at first realise it was the percentage difference between 1913 and now. Of course, it is perfectly obvious that when you have a war, and war debts, that the percentage of these debts is an enormous volume of the total increase.

Mr. COVE: I read the exact words.

Mr. BALDWIN: I make no accusation against the hon. Member. I wanted to explain to my friends. The hon. Member must recollect that we have a reputation for being slow thinkers. I was very glad to hear my hon. Friend the Member for Ecclesall (Sir S. Roberts). He, naturally, coming from Sheffield, was very interested in new productive enterprise. I think the suggestion he made was very interesting and well worthy of consideration. The moat amazing suggestion was from my old Friend the Member for South Molton (Mr. Lambert-). I remember many years ago Mr. Asquith saying to me: "I have long ceased to be either surprised, or disgusted, at anything that can happen." In this matter the question of disgust does not come in, and I have ceased to be surprised at anything. While at first sight it seemed a very plausible suggestion we cannot forget what has been in the blood of this House for many centuries. The House has fought for supremacy in finance and whether another body was co-equal, or superior, whatever party was in power in this House, I think there would be a continuous fight until this House either went under or came out on top.
The hon. Member for North Salford (Mr. J. P. Morris) also made an interesting speech. He spoke about rationing the Departments. What does one mean exactly by rationing? You may say that in one way the Departments are rationed now. Their expenditure is carefully checked, and certain things are allowed and certain things are disallowed. By
that rationing he means that when a Department has put in a figure, and when you have more or less got an agreement what that figure shall be, you say: "Then you are going to have 75 per cent. of that." The difficulty with that is that you cannot apply rationing to War pensions or to any Department where any large portion, or the whole portion, of its expenditure is statutory or contractual. I can assure my hon. Friends, as having had some experience both of Government Departments and of "axes," because I was alive when the Geddes axe was wielded, there are immense practical difficulties in the way of rationing. If you attempted to carry out rationing, even on a Department where the bulk of its expenditure was not a statutory or contractual obligation, you would in fact create great anomalies and great hardships, and you would probably do some very grave injustices. It is really too much like the unjust steward rendering his accounts.
I have dealt with a number of the speeches, and I am sure that everyone will feel that we have had a most useful Debate. These Debates on Wednesdays are of the greatest value for ventilating opinions. They are not, and cannot be, Debates in which Ministerial policy is set forth at any length. I was myself for so many years a private Member that I am always very jealous of these days for the private Members, and I am very glad to think that to-day has been a private Member's day, and that we have had no speech from any Front Bench except the one which, as a matter of courtesy, I am delivering to the House at this moment.
I should like to make one or two general observations before I sit down. The burden of this Debate has been the urging upon the Government not to relax for one moment the pressure for economy. Not much has been said directly to-day as to the direction in which economy is to be sought, but it is clear that in the minds of every Member is that desire, even if we cannot repeat —and no one expects us to repeat—the phenomenal reductions which were made between 1931 and 1932, yet they do want to feel that the Government will not relax their pressure, Departmental pressure all the time. They want to feel that the Government fully realise the
pressure and the burdens of taxation. Anyone who has read the recent speeches of the Chancellor of the Exchequer will recognise freely that he regards the present burden as excessive. He also said the other day that to increase that burden would he disastrous, and he has given very definite pledges about economy. He said in a speech delivered about a month ago—
While we cannot expect to save tens of millions of pounds by economy, there are economies which individually may not be of a very striking character, but put together they make up a substantial sum, and it will be the duty of the Government to show the House of Commons and the country that they will not tolerate unnecessary expenditure until it is possible again to reduce taxation.
The scrutiny, I can assure the House, is always going on, and in the aggregate the savings are important. Out of this year's Estimates, excluding some 11 mainly token votes which show no change, well over half show a reduction, which is no mean performance after what was done last year, and of those that show increases three of them are increased solely by reason of the absence of receipts from Ireland, quite a number solely by reason of the fall in receipts from fees of different kinds, and a few have been increased by the growth of contractual charges. The watch is constant on expenditure, and I can assure the House that the Chancellor of the Exchequer, the Financial Secretary—a very important person in these days—and the whole of that most efficient staff at the Treasury are as alive to their responsibilities as any Member of this House would like to see them.
I want to say a word on the reduction of taxation. I want to tell the House how I regard it. I am not going to give my views of what ought to be done, because here again I should be impinging on the prerogative of the Chancellor of the Exchequer. I am not the Chancellor of the Exchequer, but I do not see, as he has said in that speech, from where reductions of tens of millions are to come. I believe that you will never get them unless some course were pursued, as has been advised in some quarters today, of gambling with the future. I believe that the real reduction of taxation will come when you are able to get an increase of revenue. That sounds a
platitude, but until you can get the yield of the revenue, and especially those great Inland Revenue duties, unless you get an increase there, I do not see very much prospect of getting substantial reliefs apart from that. Those can only come by an improvement in trade.
I come back to the question of the employment of our people. There is nothing which has exercised my mind during the last 11 years more than that. Allusion was made to the election into which I led my party in 1923. I led them to it because I believed that there was nothing else at that time which would help us to fight the unemployment which was beginning and which I saw coming, and which I had little hope at that time of seeing remedied. I do not regret to-day what I did then. I think that we were perfectly right, but the whole situation to-day is still more difficult because now the prosperity of our industry is so wrapped up with the international situation. That makes the great importance of the World Conference, and there is no doubt, as has been said over and over again, we have to do all we can to get reduced tariffs in the world and to get the exchanges set in order. I hope that something in that last respect may be done in the negotiations we are having with our friends in the Argentine, but until world causes are set in order we cannot advance beyond a certain point.
Our situation to-day, I believe, bad as it is, is more favourable than that in any other country in the world, and I take hope from that fact. But I want the House to remember that there is one method of reducing taxation, and that is by reducing it at the expense of the social services, and this Government will not do that. It is perfectly true that many sacrifices were made and made in all classes. I hope that sometimes the party opposite, when they expatiate, and quite rightly, on the sufferings of the very poor, will not forget the real sacrifices which have been made by many poor in their glad consent for the sake of the country to knock 40 per cent. off their incomes from the funds. Our people made great sacrifices there, and, more remarkable, it was made a year after the great sacrifices were made by all the rest of the people. But naturally, when a year or 15 months have gone by after you have made your sacrifice, and you can yet see little that helps, not realising the
sounder condition of the country and the more favourable environment for its expansion, but seeing only that work does not come, there is no wonder men's hearts fail them.
What we have to try and do in this House is to keep up our courage, and the courage in the country, with the certain hope that if we keep on courageously we shall do better. I have great hopes of the World Conference. I have great hopes of the position in which we find ourselves. I think that we are ready to take advantage now of what may come, and, while I do not like to use the expression of the Chancellor of the Exchequer, "Pegging away," because everyone interpreted it wrongly the other day, I would rather say: "Let us go forward with high courage and with hope practising those very virtues which the

House would have us do—economy and thrift—and we shall see better times." I would say, on behalf of the Government, that we accept the Motion. There is only one thing I will say about it. I want it to be clear the sense in which I accept the word "intolerable." I do not accept it in its literal meaning. I accept it in its meaning in good, classical English.

But one half-pennyworth of bread to this intolerable deal of sack !

Perhaps that intolerable voice is speaking. If I may take the word "intolerable" in that sense, I accept that Motion on behalf of the Government.

Question put, "That the words proposed to be left out" stand part of the Question.

The House divided: Ayes, 277; Noes, 46.

Division No. 63.]
AYES.
[7.30 p.m.


Acland-Troyte, Lieut.-Colonel
Craddock, Sir Reginald Henry
Harbord, Arthur


Adams, Samuel Vyvyan T. (Leeds, W.)
Cranborne, Viscount
Hartland, George A.


Agnew, Lieut.-Com. P. G.
Craven-Ellis, William
Harvey, George (Lambeth, Kennlngt'n)


Albery, Irving James
Crooks, J. Smedley
Harvey, Major S. E. (Devon, Totnes)


Allen, Sir J. Sandeman (Llverp'l, W.)
Crookshank, Col. C. de Wlndt (Bootle)
Headlam, Lieut.-Col. Cuthbert M.


Allen, William (Stoke-on-Trent)
Crookshank, Capt. H. C. (Gainsb'ro)
Hellgers, Captain F. F. A.


Amery, Rt. Hon. Leopold C. M. S.
Croom-Johnson, R. P.
Heneage, Lieut.-Colonel Arthur P.


Anstruther-Gray, W. J.
Crossley, A. C.
Hapworth, Joseph


Applln, Lieut.-Col. Reginald V. K.
Dalkelth, Earl of
Herbert, Capt. S. (Abbey Division)


Apsley, Lord
Davies, Maj. Geo. F.(Somerset, Yeovll)
Hills, Major Rt. Hon. John Waller


Aske, Sir Robert William
Davison, Sir William Henry
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.


Astbury, Lieut.-Con.. Frederick Wolfe
Denman, Hon. R, D.
Hore-Bellsha, Leslie


Atkinson, Cyrll
Denvllle, Alfred
Hornby, Frank


Baldwin, Rt. Hon. Stanley
Dlckie, John P.
Horebrugh, Florence


Baldwin-Webb, Colonel J.
Donner, P. W.
Howard, Tom Forrest


Balfour, George (Hampstead)
Doran, Edward
Howltt, Dr. Alfred B.


Balfour, Capt. Harold (I. of Thanet)
Drewe, Codric
Hudson, Capt. A. U. M. (Hackney. N.)


Balnlel, Lord
Duckworth, George A. V.
Hudson, Robert Spear (Southport)


Barclay-Harvey, C. M
Dugdale, Captain Thomas Lionel
Hume, Sir George Hopwood


Beauchamp, Sir Brograve Campbell
Duncan, James A. L. (Kensington, N.)
Hunter, Dr. Joseph (Dumfries)


Benn, Sir Arthur Shirley
Dunglass, Lord
Hunter, Capt. M. J. (Brigg)


Blrchall, Major Sir John Dearman
Ellis, Sir R. Geoffrey
Iveagh, Countess of


Bird, Ernest Roy (Yorks., Sklpton)
Elmley, Viscount
James, Wing-Com. A. W. H.


Borodale, Viscount.
Emmott, Charles E. G. C.
Joel, Dudley J. Barnato


Bowyer, Capt. Sir George E W.
Erskine, Lord (Weston-super-Mare)
Johnston, J. W (Clackmannan)


Braithwalte, J. G. (Hillsborough)
Essenhigh, Reginald Clare
Jones, Henry Haydn (Merioneth)


Briscoe, Capt. Richard George
Everard, W. Lindsay
Jones, Lewis (Swansea, West)


Broadbent, Colonel John
Fermoy, Lord
Kerr, Lieut.-Col. Charles (Montrose)


Brown, Ernest (Leith)
Flelden, Edward Broeklehurst
Kerr, Hamilton W.


Brown,Brig.-Gen.H. C.(Berks.,Newb'y)
Ford, Sir Patrick J.
Klrkpatrick, William M.


Browne, Captain A. C.
Forestier-Walker, Sir Leolln
Knebworth, Viscount


Buchan-Hepburn, P. G. T.
Fox, Sir Gilford
Knox, Sir Alfred


Burnett, John George
Framantle, Sir Francis
Lambert, Rt. Hon. George


Cadogan, Hon. Edward
Fuller, Captain A. G.
Law, Sir Alfred


Campbell, Vice-Admiral G. (Burnley)
Gault, Lieut.-Col. A. Hamilton
Law, Richard K. (Hull, S.W.)


Caporn, Arthur Cecil
Gibson, Charles Granville
Lelghton, Major B. E. P.


Carver, Major William H.
Gllmour, Lt.-Col. Rt. Hon. Sir John
Lennox-Boyd, A. T.


Cautley, Sir Henry S.
Glossop, C. W. H.
Levy, Thomas


Cazalet, Thelma (Islington, E.)
Goff, Sir Park
Liddall, Walter S.


Chapman, Col.R. (Houghton-le-Spring)
Goodman, Colonel Albert W.
Lindsay, Noel Ker


Chapman. Sir Samuel (Edinburgh, S.)
Gower, Sir Robert
Lister, Rt. Hon. Sir Philip Cunllffe-


Clarke, Frank
Graham, Sir F. Fergus (C'mb'rl'd, N.)
Little, Graham-, Sir Ernest


Clarry, Reginald George
Grattan-Doyle, Sir Nicholas
Llewellin, Major John J.


Cobb, Sir Cyril
Greaves-Lord, Sir Walter
Lloyd, Geoffrey


Cochrane, Commander Hon. A. D.
Gretton, Colonel Rt. Hon. John
Loder, Captain J. de Vere


Colville, Lieut.-Colonel J.
Grimston, R. V.
Lumley, Captain Lawrence R.


Conant, R. J. E.
Guinness, Thomas L. E. B.
Lyons, Abraham Montagu


Cook, Thomas A.
Gunston, Captain D, W.
Mabane, William


Cooper, A. Duff
Guy, J. C. Morrison
Mac Andrew, Lt.-Col C. G. (Partick


Copeland, Ida
Hales, Harold K.
MacAndrew, Capt. J. O. (Ayr)


Courtauld, Major John Sewell
Hannon, Patrick Joseph Henry
McCorquodale, M. S.


MacDonald, Malcolm (Bassetlaw)
Pickford, Hon. Mary Ada
Somervllle, Annesley A. (Windsor)


McEwen, Captain J. H. F.
Potter, John
Sotheron-Estcourt, Captain T. E.


McKie, John Hamilton
Power, Sir John Cecil
Southby, Commander Archibald R. J.


Maclay, Hon. Joseph Paton
Procter, Major Henry Adam
Spears, Brigadier-General Edward L.


McLean, Major Sir Alan
Ramsay, Capt. A. H. M. (Midlothian)
Spencer, Captain Richard A.


Macmillan, Maurice Harold
Ramsay, T. B. W. (Western Isles)
Stanley, Lord (Lancaster, Fylde)


Magnay, Thomas
Ramsden, Sir Eugene
Stanley, Hon. O. F. G. (Westmorland)


Maklns, Brigadier-General Ernest
Rankin, Robert
Stewart, J. H. (Fife, E.)


Manningham-Buller, Lt.-Col. Sir M.
Ray, Sir William
Stewart, William J. (Belfast, S.)


Margesson, Capt. Rt. Hon. H. D. R.
Reed, Arthur C. (Exeter)
Storey, Samuel


Marsden, Commander Arthur
Reld, David D. (County Down)
Stourton, Hon. John J.


Martin, Thomas B.
Reld, James S. C. (Stirling)
Sueter, Rear-Admiral Murray F.


Mason, David M. (Edinburgh, E.)
Remer, John R.
Sutcllffe, Harold


Mason, Col. Glyn K. (Croydon, N.)
Rentovl, Sir Gervals S.
Thomas, James P. L. (Hereford)


May hew, Lieut.-Colonel John
Renwick, Major Gustav A.
Thompson, Luke


Merrlman, Sir F. Boyd
Roberts, Sir Samuel (Ecclesall)
Thomson, Sir Frederick Charles


Milne, Charles
Robinson, John Roland
Thorp, Linton Theodore


Molson, A. Hugh Elsdale
Ropper, Colonel L.
Tltchfield, Major the Marquess of


Morris, John Patrick (Salford, N.,
Rosbotham, Sir Samuel
Todd, Capt. A. J. K. (B'wlck-on-T.)


Morrison, William Shephard
Ross, Ronald D.
Touche, Gordon Cosmo


Moss, Captain H. J.
Ross Taylor, Walter (Woodbridge)
Train, John


Munro, Patrick
Ruggles-Brise, Colonel E. A.
Ward, Lt.-Col. Sir A. L. (Hull)


Nail, Sir Joseph
Runge, Norah Cecil
Ward, Irene Mary Bewick (Wallsend)


Nail-Cain, Hon. Ronald
Russell, Albert (Kirkcaldy)
Ward, Sarah Adelaide (Cannock)


Nation, Brigadier-General J. J. H.
Russell, Alexander West (Tynemouth)
Watt, Captain George Steven H.


Newton, Sir Douglas George C.
Rutherford, John (Edmonton)
Wedderburn, Henry James Scrymgeour-


Nicholson, Godfrey (Morpeth)
Rutherford, Sir John Hugo (Llverp'l)
Whiteside, Borras Noel H.


Nicholson, Rt. Hn. W. G. (Petersf'ld)
Samuel, Sir Arthur Michael (F'nham)
Williams, Charles (Devon, Torquay)


North, Captain Edward T.
Samuel, Samuel (W'dsworth, Putney)
Williams, Herbert G. (Croydon, S.)


Nunn, William
Sandeman, Sir A. N. Stewart
Wills, Wilfrid D.


O'Connor, Terence James
Sanderson, Sir Frank Barnard
Wilson, G. H. A. (Cambridge U.)


Ormsby-Gore, Rt. Hon. William G.A.
Savery, Samuel Servington
Windsor-Clive, Lieut-Colonel George


Palmer, Francis Noel
Scone, Lord
Winterton, Rt. Hon. Earl


Patrick, Colin M.
Selley, Harry R.
Wise, Alfred R.


Peake, Captain Osbert
Shaw, Helen B. (Lanark, Bothwell)
Womersley, Walter James


Pearson, William G.
Shaw, Captain William T. (Forfar)
Wood, Sir Murdoch McKenzle (Banff)


Peat, Charles U.
Shepperson, Sir Ernest W.
Worthington, Dr. John V.


Penny, Sir George
Shute, Colonel J. J.
Young, Rt. Hon. Sir Hilton (S'v'noaks)


Percy, Lord Eustace
Slater, John



Perkins, Walter R. D.
Smiles, Lieut.-Col. Sir Walter D.
TELLERS FOR THE AYES.—


Petherick, M.
Smith, Louie W. (Sheffield, Hallam)
Mr. Boulton and Sir J. Wardiaw-


Peto, Sir Basil E. (Devon, Barnstaple)
Smith-Carington, Neville W.
Milne.


Peto, Geoffrey K.(W'verh'pt'n,Bllston)
Somervell, Donald Bradley



NOES.


Adams, D. M. (Poplar, South)
Grenfell, David Rees (Glamorgan)
McGovern, John


Attlee, Clement Richard
Grundy, Thomas W.
Maclean, Nell (Glasgow, Gcvan)


Banfield, John William
Hall, F. (York, W.R., Normanton)
Mallalleu, Edward Lancelot


Batey, Joseph
Hall, George H. (Merthyr Tydvll)
Maxton, James


Bevan, Aneurin (Ebbw Vale)
Harris, Sir Percy
Milner, Major James


Buchanan, George
Hicks, Ernest George
Nathan, Major H. L.


Cape, Thomas
Janner, Barnett
Parkinson, John Allen


Cocks, Frederick Seymour
Jones, J. J. (West Ham, Silvertown)
Price, Gabriel


Cove, William G.
Jones, Morgan (Caerphllly)
Rathbone, Eleanor


Crlpps, Sir Stafford
Klrkwood. David
Salter, Dr. Alfred


Daggar, George
Lansbury, Rt. Hon. George
Tinker, John Joseph


Davles, David L. (Pontypridd)
Lawson, John James
Williams, Edward John (Ogmore)


Edwards, Charles
Llewellyn-Jones, Frederick
Williams, Dr. John H. (Llanelly)


Foot, Dingle (Dundee)
Logan, David Gilbert
Williams, Thomas (York, Don Valley)


George, Major G. Lloyd (Pembroke)
Lunn, William



Graham, D. M. (Lanark, Hamilton)
McEntee, Valentine L.
TELLERS FOR THE NOES.—




Mr. C. Macdonald and Mr. Groves.


Question put, and agreed to.

Resolved,

" That this House views with anxiety the existing high level of taxation and diminishing revenues in this country, believes that this creates an intolerable burden on industry, and urges His Majesty's Government to consider means by which this burden may be lessened at the earliest possible moment."

MINING INDUSTRY.

7.38 p.m.

Mr. DICKIE: I beg to move,
 That, in the opinion of this House, it is essential in the national interest and the
interests of the coal-mining industry that the coal export trade should be freed as speedily as possible from the restrictions imposed by Part I of the Coal Mines Act, 1930.
It is safe to say that no industry has occupied a greater share of the attention of this House than the mining industry. Commission after Commission has been appointed to inquire into the state of the industry, Act after Act has been placed upon the Statute Book, to regulate and control it, and even in the brief lifetime of this Parliament the subject has been debated on several occasions. In every Vote of Censure moved from the
other side of the House a great deal of time has been devoted to what I might call the tottering throne of old King Coal. Despite these facts, I and my friends who were associated with me, who represent mining constituencies, who are very gravely concerned as to the position in those constituencies and who view the future with general alarm, make no apology for directing the attention of the House once again to the steady decline in our export trade in coal, to the position which is created by that steady decline and the manner in which it affects the national interests.
Next to agriculture the mining industry remains still our greatest industry. It is the foundation of all our heavy industries. In the domain of domestic industries it is perfectly safe to say that, no matter what may be the scientific development in the utilisation of other forms of fuel, for us for many years coal must remain the foundation on which the whole structure of our industrial edifice must rest. It is equally true to say that if we are to maintain our position as the greatest exporting nation in the world it is vital that we should maintain our exports of coal. In bulk they are the greatest of our exports. The shipowners depend on the outward freight to cheapen the inward freight and thereby enable us to purchase more cheaply the food and raw material that we need for our sustenance, the raw material of our industry, a matter of primary importance in a country which must draw its supplies from the ends of the earth, and upon which it depends as a competitive nation in maintaining its position in the markets of the world.
The coal industry must, therefore, remain as a fundamental factor in our economic life. Its effect upon our national life is not to be judged by the state of prosperity or depression in the mining industry alone. The prosperity which is derived from the mining industry finds its way into the broad stream of our national life. It percolates into the thousand channels of the national life and enriches and benefits the whole. Similarly, the severe depression in the coal exporting areas, which reduces them, as they have been reduced during the last few years, to a state of beggarly demoralisation, with its consequent loss of purchasing power, due to the poverty of those producers of wealth, is reflected
in every industry catering for the home market, apart altogether from its effect upon our international trade. I bring forward the Motion in the hope that it will appeal not only to those who represent mining constituencies, and who are directly interested in the industry, but to the general body of hon. Members, and that the Government will accept it and proceed at once to implement it, for the situation in those areas is becoming really desperate.
Every time that I am asked what are my objections to the Mines Act in its application to the export trade, I am reminded of an episode in the life of the great Dr. Johnson. It is said that on one occasion when he was on one of his trips to Scotland he stayed for dinner at Oxford, celebrated then for its learning, famous since for its Union, and now notorious for its patriots. On that occasion he dined on chicken. The dinner does not appear to have been a remarkable success, for when he was asked about it afterwards he said that the chicken was badly hatched, badly reared, badly Tilled, badly dressed, badly cooked and badly served, otherwise it appears to have been quite a good chicken. So it is with the Act of 1930 and its application to the export trade. Whatever may be said of that Act as far as inland trade is concerned, I submit that it is impossible to bring forward any valid arguments for a continuance of that part of the Act which inflicts a stranglehold on the export section of the industry by regulating the output and imposing the fixation of prices.
The disastrous effect of the application of the provisions of the Act to the export industry was foreseen by hon. Members who opposed it during its passage through this House, and by many people outside who were well qualified to speak on behalf of the industry. Almost every one of the Ministers of the present National Government opposed this Act during its passage through this House, including the two hon. Members who have been Secretary for Mines, and they opposed it particularly in its application to the export section of the industry. I will not weary the House with long quotations from speeches, they can be found in the records of the House and hon. Members can read them for themselves; but I say quite frankly that I
am astonished that members of the present Government should have allowed this Act to remain on the Statute Book unamended for 18 months, when month after month was clearly revealing that their own fears were well founded and their own phophecies well justified. As far as outside opinion is concerned I could quote many authorities as to the effect of the application of its provisions to the export trade, but I will content myself with one from a colliery in my own constituency. The relevant portion of the letter is this:
 The present Government has definitely stated that if any district fails to produce a scheme the Government would force one upon them, and it was undoubtedly this threat which intimidated many into voting in favour of a so-called voluntary scheme of their own making, although they had little or no confidence that it would work without inflicting serious loss both on owners and workmen throughout the county, as, owing to the fact that the Durham coal trade lives largely by its exports, any control, with its resultant restriction of output, will increase costs, while price fixing will almost inevitably lead to the loss of orders in foreign markets.
That is a letter from the chairman of a colliery in my own constituency—Mr. Sydney Wilson.

Mr. BATEY: That is a tin-pot place.

Mr. DICKIE: The hon. Member, as on a previous occasion when I was speaking, is a little premature. He will hear something about the bigger concerns before I have finished. But the same thing runs right through the exporting districts. The hon. Member for Spennymoor (Mr. Batey) knows the county of Durham as well as I do, and he knows the disastrous state of things prevailing there partly as a result of the 1930 Act. That Act came into operation on the 1st January, 1931, and it was not long before the dismal forebodings of those who had foretold what was likely to happen were fully justified. The matter was raised in this House and on the 19th March, 1931, the present Secretary for Mines expressed grave apprehension as to the effect of the Act upon our export trade. He concluded his speech on that occasion with these words:
 Those who attribute the fall in shipments to the quota system say that the quota system is the worst that could possibly be adopted, for it takes no account of the varying classes of coal nor of the fluctuating
demand which has always existed and always will exist in the coal trade. It is also held by some of the shippers that the coal market can only be maintained by full production and low costs, and it is the opinion of some coal traders that this particular system has meant higher costs. I hope the Minister will believe me when I say that evidence comes to us from all parts of the country that there is grave disquiet at the working of the quota.
There is even greater disquiet to-day. The hon. Member for Leith (Mr. E. Brown) concluded by saying:
 I beg him not to take merely the departmental view that the Act is all right and must be all right for everybody, merely because some central committee says so."—[OFFICIAL REPORT, 19th March, 1931; Col. 2241, Vol. 249.]
That speech was made by the Secretary for Mines when he was a private Member of the House. He is now Secretary for Mines and I am a private Member; and I am making the same appeal to him as he made then to the then Secretary for Mines. This Act is not all right. As far as the export trade is concerned it is all wrong, and its effects must be remedied at once unless we are prepared to face a still further decline in our sales to foreign countries, with disastrous results to our industries, our shipping, to the balance of trade and to the nation as a whole. Before I deal with the question of minimum prices may I remind hon. Members of the figures relating to production and export? In 1913 we produced 287,000,000 tons of coal, and of that we exported as cargo 73,000,000 tons, and as bunkers 24,000,000 tons; making a total of 97,000,000 tons. That 97,000,000 tons—and this is the point to which I want to draw special attention—represented 33.8 per cent. of our total production. In 1932 our total production had fallen to 209,000,000 tons, our exports of cargo coal to 39,000,000 tons and our exports of coal in bunkers to 14,000,000 tons, a total of 53,000,000 tons. But that 53,000,000 tons represented only 25 per cent. of our production. We have lost in 1932 as compared with 1913 no less than 44,000,000 tons of coal; and we are actually exporting 8.8 per cent. less of the diminished production.
It must be remembered that a million tons of coal represents employment for 4,000 men. We have lost 44,000,000 tons of coal, and that represents a loss in employment of 176,000 miners. That is something which should give every hon.
Member cause for deep thought. But that is not all the loss in employment, because it must be remembered that there is a loss of employment to those engaged in shipping, on the railways, in our docks and harbours; and all the ancillary trades. In addition there is the value of these 44,000,000 tons of coal which we have lost, and the House will realise the serious effect which this has upon the balance of trade. I do not quote these figures as evidence against the Coal Mines Act of 1930, but merely to draw the attention of the House to the importance of our export trade in coal. Coming to the position during the last few years I want to point out that by 1929 we were recovering steadily from the effects of the long drawn-out stoppage of 1926. Our exports, I am speaking of cargo alone, had risen again to the substantial total of 60,000,000 tons.

Mr. CURRY: Can the hon. Member give us the percentage which the figure of 60,000,000 tons bears to the total production in 1929?

Mr. DICKIE: I brought a mass of figures with me but I cannot put everything into terms of percentages. If I did I should occupy too much of the time of the House. The point I want hon. Members to remember is that when the Act came into force in January, 1931, there were no quotas or exchange restrictions, or licensing regulations, in operation against our coal, hut the very moment it came into force our exports began to fall, and to fall heavily indeed. Whereas in 1930 we only lost 5,000,000 tons in 1931 we lost no less than 12,000,000 tons, and in 1932 we lost another 4,000,000 tons, so that our exports now stand at the phenomenally low figure of only 39,000,000 tons, or little more than half of our exports in 1913. This tremendous decline was no doubt due to a number of causes, not entirely to the Coal Mines Act of 1930, but it is difficult to determine how much of the decline to attribute to each. There is the world depression and the greater use of other forms of fuel, oil, electricity, white coal, tariffs, licensing systems, quota restrictions and, of course, the Act of 1930, all of which played their part.
Some of these things are imponderable, but two of them we can at least weigh roughly, the restrictions imposed by other
nations and those which we have imposed upon ourselves. I ask the House to look at foreign restrictions, for it is no part of my case that the whole of this decline is due to the Act of 1930. The countries where the quota system is in operation are France, Germany and Belgium. Take France. The quota was imposed by the French Government in July, 1931; that was the first evidence of a quota restriction by foreign countries. In two years, from 1930 to 1932, the imports into France declined by 7,000,000 tons, from 25,000,000 to 18,000,000 tons, and our share of that decline was from 14,000,000 tons to 9,000,000 tons. That is to say, out of a total reduction of 7,000,000 tons in the imports into France our share of that loss was no less than 5,000,000 tons. Expressed in terms of percentage, as far as total losses are concerned our reduction was 6 per cent., whilst every other country, Germany, Poland, Holland and Belgium, showed an increase of imports into France. That is something which gives cause for thought and should give the Government cause for grave concern.

Mr. GODFREY NICHOLSON: Is it not a, fact that we always exported to France up to the full amount that the French allowed up to export, and that their system of licensing has caused that discrepancy?

Mr. DICKIE: There was then no system of licences. That system did not come in until later. The case which is sometimes attempted to be made against the National Government, that the decline in our export of coal is due to tariffs and retaliation, is a case which will not bear a moment's examination. [HON. MEMBERS: "But it is true."] I hope that the hon. Member for Chesterle-Street (Mr. Lawson) will prove that it is true, and I shall be very much surprised to see bow it is done. Then look at Germany. In Germany the quota was not imposed until February, 1932. We were not even considering tariffs in this country at that time. It is idle and foolish to say that a restriction of this kind was a form of retaliation when we had no tariffs of any kind and were only beginning to consider the use of that particular weapon. We had to share the brunt of the loss as far as Germany was concerned. We lost 2,564,000 tons. France and Holland increased their exports to Germany, while the Saar and
Czechoslovakia decreased only very slightly. Belgium did not impose a quota until October, 1931. In the same two years the imports into Belgium declined by 3,600,000 tons. We lost 1,340,000 tons—not so bad in total, but in percentage we actually suffered a loss of over 50 per cent. in the quantity supplied to Belgium.
These are quota countries. The restrictions that they imposed have undoubtedly restricted our exports to those countries, but I do not believe that they account for the whole of the reduction. Restrictions imposed by foreign countries make trading somewhat difficult for coalowners and exporters. I cannot see that that is any reason why this House should add to their difficulties by legislative enactments which are almost impossible of application to a difficult and complex business like the export of coal, and only hinder and hamper our exporters and coalowners in their endeavour to secure business. Over the first we have no control, but the second, the combination of quota and price restrictions, I regard as a double-headed Frankenstein of our own creation, which is threatening to destroy our export trade. If we do not destroy it, it will destroy us so far as that particular section of the industry is concerned. I have always found it exceedingly difficult to understand why these restrictions were imposed on the export trade.
We have had an extremely interesting speech from the Lord President of the Council. As I listened to him I wondered whether the Cabinet was embarking upon an experiment based on the theory which the right hon. Gentleman propounded a year or two ago, that the solution of our industrial problems was to be found in a restriction of our exports. I could never see how it was to be done. Why these restrictions should be imposed by ourselves on one of our vital industries I am really at a loss to understand. I believe in freedom from these restrictions. But part at least of this lost business is recoverable, despite the quotas and the licensing system. Part of it has been lost on account of a feeling of resentment against the fixation of prices, and that despite the well-known fact that a very large quantity of coal is being purchased below the minimum
price and also because of the uncertainty of being able to obtain supplies, owing to the quota.
There is a very powerful opposition in every one of these countries to the system of licensing and quotas which has been established there, and if we remove the objectionable features over which we have control we could immeasurably strengthen the opposition in those countries and perhaps succeed in having these things swept away altogether. We are not holding our own. That is the main feature that we have to visualise. The whole of the other big exporting countries, grouped together in those three particular years of which I have spoken, lost in their export trade in coal only 28 per cent. This little country lost 35 per cent. The total loss of the quota countries is something like 9,000,000 tons. A fair proportion of that is recoverable, and I regard it as pure defeatism to regard those orders as an irrecoverable loss. They can be regained, but the only way to regain them is to give our coal-owners freedom to produce and our exporters freedom to go out into the markets of the world and seek orders.

Mr. MARTIN: What does the figure of 9,000,000 tons represent?

Mr. DICKIE: The 9,000,000 tons is the total which we have lost in those three years, in what I call the quota countries. These restrictions of the minimum price and a quota have made it very much more difficult to get business. As orders became scarcer production decreased, naturally, and as production decreased the cost per ton increased. Irregularity of working always leads to an increase of cost. In the case of the average pit producing 500 to 1,000 tons a day one single day lost during a fortnight will put up the cost for the whole of that period to anything ranging from 7d. or 8d. to 1s. a ton—a very serious charge on the industry, and more serious than the royalty charge of which we hear so much from hon. Members opposite. Output and production costs are very closely related. But our coal can only sell at world prices. That is one of the things of which we are losing sight. We are deliberately choosing to pursue a policy of handicapping, ourselves in our attempt to meet competition in the markets of the world. If persisted in it can only lead to a still further decline, to a point
where the purchaser will buy only from us those classes of coal which he cannot obtain elsewhere.
Despite the world depression and the diminished demand, I consider that there is still a very wide field in which we can recapture lost trade. It must also be remembered that when you have greater freedom and keener prices you will open up new avenues to business. There are still new avenues. But the objections to the quota. and the minimum price have been reiterated so often that I do not want to go into them in detail. So far as the quota is concerned, I regard it as altogether an evil. In the way it works it is a premium on inefficiency. The call everywhere to-day is for efficiency in industry, as in every other walk of life, yet here in this important industry we are actually keeping alive pits which ought to be closed, many of which ought to have been closed years ago, and in some of which no miner ought to be allowed to work at all to-day. These pits are being kept alive at the expense of the economic pits and at the expense of the miners' wages, for that is how it works out.
Let me say a few words about the method of allocating a quota. It is both cumbersome and slow, and in the export trade it is a positive hindrance to business. The very existence of the quota prevents the making of long-term contracts, and the uncertainty as to what quota it will get deprives the whole industry of anything in the way of security or stability. In the districts the quota is allotted on the standard tonnage of 1929. That was a good year for some pits, but a bad one for others, and a moderate one for still others. No allowance is made for the change in circumstances since. The allocations are made, and every pit which was allotted a standard tonnage in 1929 can claim its share of the allocation now. The quota falls like the gentle rain from heaven upon the efficient and upon the inefficient alike. A demand may arise for some particular class of coal, as in the case of Northumberland steam coal some time ago. The demand cannot be met unless the collieries which are actually supplying that coal are prepared to face the possibility of having to pay a fine of 2s. 6d. for every extra ton of coal that they produce, or unless they are prepared to pay, not what was in-
tended under the Act, but an exorbitant figure, Is. 6d., 1s. 9d. or even in some cases as much as 2s. 6d.
The colliery which pays the best wages is thus penalised. The collieries which run uneconomic pits are allowed to continue, and some of them in June of last year, though actually bankrupt were living upon the quota. In an age when we have pleading in every direction for efficiency, that is an outrage and a scandal. It is something that in my judgment ought to be abolished altogether. A very important point is this: What happens when this transfer of quota takes place? The efficient colliery which has exhausted its quota has need of additional quota. It seeks to buy from its neighbour which may have quota to dispose of. The owner of the neighbouring colliery knows that the other fellow is in a tight corner. Accordingly, he puts up his price and asks for an additional 1s. 6d. or 1s. 9d. per ton. In order to keep his pit going in the national interests, and keep his men employed, rather than be fined 2s. for overproducing, the owner of the efficient colliery which has exhausted its quota consents to pay the additional 1s. 6d. or 1s. 9d. That is a charge against his production costs. It enters into his ascertainment and affects wages. What happens at the other end A man sitting in his office drops the telephone, lights a cigar, touches a bell, tells a junior clerk to make an entry in his ledger and he makes a clear profit of 1s. 6d. or 1s. 9d. per ton. That is the condition of things in the mining industry to-day and I tell the Secretary for Mines that it is high time it was stopped. In some cases the sale of quota has been refused altogether or has only been made under pressure.
Now I come to the question of the minimum price. [Hog. MEMBERS: "What about the minimum wage?"] I am prepared to deal with that subject also on the proper occasion. At the moment I want to deal with the minimum price, which, I may remind hon. Members opposite, affects the wages of the miner. That is a fact too often forgotten on the other side of the House. There is far too great a tendency for hon. Gentlemen opposite to talk as though nobody but themselves knew anything about the mining industry or had any interest in the miners. [HON. MEMBERS: "Hear, hear !"] I am very glad to hear that
approval from the hon. Member for Chester-le-Street (Mr. Lawson). He at any rate knows that it is not right—

Mr. BATEY: That your statement is not true?

Mr. DICKIE: The hon. Member knows perfectly well what I mean. He knows as well as I do that many of us here have the interests of the miners at heart as much as any hon. Member opposite. Many of us have lived among the miners and know all about their daily difficulties and the troubles which they have to face and the hunger and the privation which both miners and miners' wives are suffering. We know these things as well as any man who calls himself a miner's Member, and we are anxious to do something practical here and now to help them to better conditions. In my judgment the minimum price is worse than the quota. It may be possible to make out a case for the fixation of prices in the inland trade, but it is utterly impossible to make out any case at all for the fixation of prices in the export trade. The House should remember that we are only one seller. We are trying to sell and to make world prices. We are trying to compel the buyer to buy at onr figure although there are other willing sellers in a free market. That is what is happening under the minimum price. The principle is so unsound that I wonder how on earth it was ever accepted.
It is quite impossible to keep these prices secret. They are known to our foreign competitors. The moment the executive board in any district settles prices, the wires are busy and the prices are known in Hamburg, Antwerp, Oslo, Berlin, and everywhere else, in some cases, before they are known to the owners in the district itself. That is a state of things which would be tolerated in no other industry and which no other industry could survive. Under this Act, too, we deny the privilege which is always accorded to the buyer who places a large order. If the minimum price is observed—I say if it is—the seller must quote to the purchaser the same price per ton for 1,000 tons as for 100,000 tons. It is little wonder that the large buyers on the Continent should look elsewhere for supplies. What would happen in the engineering industry, for example, if
some of our big engineering firms were asked to tender through the Overseas Trade Department, let us say, for locomotives for a. foreign Government, and were told that they had to tender at the same rate for 10 locomotives as for 100 locomotives; and if, as soon as the tender had been received, the prices were forwarded to their Belgium, Japanese, American and other competitors. Yet that is the actual position in the coal export trade. It is sheer folly to advertise the prices to the world in this fashion.
During the debates on this subject at the end of May and beginning of June last year, I touched on the question of evasion. I said then that it was a, subject which had to be treated with great delicacy. At the present time it needs to be touched upon with even greater delicacy. The hope expressed by the President of the Board of Trade that the longer this went on the stronger would be the power of the owners and the better they would be able to deal with that sort of thing, has not been justified. Evasion has grown steadily worse, until, to-day, it is not too much to say that the export section of the industry is in a state of utter and absolute demoralisation. This Act of Parliament is undermining British commercial morality and driving honourable business men to do things which they loathe and detest. In a difficult technical and complex business of this character—and this disposes of the Amendment which I see on the Order Paper—neither the Commons House of Parliament nor any other form of tribunal can stop these evasions. Those who are evading the Act know that perfectly well. The hon. and learned Member for East Bristol (Sir S. Cripps) knows that however strong a law may be there is always a means of evading it. This law is being evaded every day and there is no power in the House of Commons or the owners to stop the evasion. The only way to stop it is to uproot the causes which have led to it.
Separately, I contend, that these two things to which I have referred are bad. Jointly they form an unholy combination which is having a terrible effect upon our export trade and our export trade will never recover until we get rid of them. I wish to deal with some of the arguments which have been used in favour of the retention of the quota. The
most illogical is one which has been used, both from the Government Front Bench and from the other side of the House. That is the argument "Oh, you have not exhausted your quota for the last quarter." What is the position? You impose a quota on a district and on the individual collieries in that district which definitely restricts their output, which prevents them under penalty from producing more. This restriction causes irregularity of working and irregularity increases the cost of production. They cannot get a higher price and you debar them from taking a lower price, which they could do if they were working at full capacity. When they complain you say, "But you have not exhausted your quota for the quarter just concluded." That is the most illogical argument that could be used.
Another argument is that our potential capacity is 300,000,000 tons, that last year we produced 210,000,000 tons, and that we ought to be content with our share of the world's production. I do not agree with that. Our potentioal capacity may be 350,000,000 or 400,000,000 tons and the actual output ought to be regulated only by the amount of coal that we are able to sell in the markets of the world. I ask is that principle to be applied in other industries such as the iron and steel industry, the cotton industry and the motor ear industry Their potential capacity for production is greater than the demand at the moment. Is that to be made a reason for Government interference and for imposing regulations which hinder and hamper their efforts to secure orders?
The third argument which I have heard is that if there is a repeal of Part I prices will slump. I do not believe it. I remember that when the Act was passing through this House people, both inside and outside the House, said that as soon as it was placed on the Statute Book it would have the effect of increasing prices enormously. Nothing of the sort happened. It was pure speculation then, and it is pure speculation now. There is nothing to show that there is likely to be any slump in the price of coal, even if Part I of the Act is repealed. I would remind the House that as far back as the 2nd June the ex-Secretary of Mines promised that he would give this matter his immediate consideration. In reply to my hon. Friend the Member for Bishop
Auckland (Mr. Curry), who asked if some assurance could be given that immediate steps would be taken to inquire into and amend the operation of Part I, the Minister said:
 I need not dwell upon it now, but I gave a definite and categorical assurance on that point. I said that we were awaiting from the Mining Association the amendments that they had under consideration, and that, as soon as those amendments had been notified to us, they would be correlated with the amendments that we had in our own minds, and the Government would decide what Amendments would then be brought forward.—[OFFICIAL REPORT, 2nd June, 1932; col. 1376, Vol. 266.]
A little later in the Debate he gave me a similar categorical and definite assurance which wound up with this:
 It is our business to do all that is humanly possible to recover those markets, upon which our export trade depends."—[OFFICIAL REPORT, 2nd June, 1932; col. 1465, Vol. 266.]
Now we are in the position that things have been going from bad to worse, and nothing has been done. I suggest that the only cure for this sort of thing is either to amend the Act so drastically as to give complete freedom to the export areas, or, failing that, to repeal Part I of the Act altogether. It may involve legislation and setting up some scheme of co-ordination of prices between districts and co-operation within the districts, particularly in the inland section of the trade, but, so far as we in the export areas are concerned, we are not prepared to be debarred from those markets which we have built up and which we enjoy to-day. We ate a maritime nation, and we have a very big coasting trade. The first coal that was borne to London or to the South of England came from Newcastle, and that is why it was called sea coal. We have captured these markets because the freight from the North of England to the South is only 4s., while the railway rate is 19s. Does anyone contend that the proposition of the ex-Minister of Mines that we should pay 15s. extra for coal in order to bolster up the railway transport is a serious business proposition It is a question of transport, and all that we ask for in those markets is that we shall have a fair field and no favour.
A few weeks ago the Minister of Mines opened some estates on the River Tyne. We have been very badly hit there, but we have not lost our courage. We have
spent £120,000 in building those estates, and they are to-day in all probability the most modern in this country. The Minister then gave us some good advice, which was that we should throw away despair. We are throwing it away, and we ask him to help us to get rid of it entirely. I will not say anything about bunkers, but I hope the Minister will consider that important aspect of the mining problem, as we are losing in that direction as well. In so far as the export trade is concerned, the Government and the Minister of Mines should do everything they can to give us back our freedom, in order that we may fight in the markets of the world for the orders on which the industry depends. This matter was placed before the House very much more eloquently than I can place it by the present President of the Board of Trade in March, 1930. What he said hits the situation exactly now, as it did then, because the position is precisely the same except that it has got a great deal worse. The right hon. Gentleman then said:
 It seems to me that, the more one looks into the question of the export trade, the more essential it is that it should be given the utmost elasticity, that no checks should be placed upon it in the interests of all concerned, but that it should have complete freedom to meet the demand as and when it arises. Do not let it be imagined for one moment that those who control the coalfields of foreign countries are going to be so merciful to us. They want to get business, and so do we, and it is our duty to capture it for the sake of the national trade and of the miners employed in it. Anything that we do to take away our freedom in the foreign export trade to capture those contracts, will be throwing away much of our present organisation for the sale of Coal."—[OFFICIAL REPORT, 11th March, 1930 col. 1167, Vol. 236.]
The position is getting steadily worse, and last week was the worst week the Tyne Improvement Commission has known since the general stoppage of 1926. On Saturday last one of the pits in my district closed down, and over 200 men were dismissed. On the same day another colliery issued notices involving the dismissal of another 700 men, and only yesterday in my constituency, the largest producing concern, owning a large number of collieries and employing 6,000 men—each and every one of those collieries was idle, and may be idle to-day, on account of the loss of trade.
I submit that this is a very important matter, and I would—

The SECRETARY for MINES (Mr. Ernest Brown): Do I gather that the hon. Member attributes all that to the operation of Part I of the Act?

Mr. DICKIE: No, and I think the House will agree that I have been perfectly clear in saying that I do not attribute all this to the Act. I am calling attention to the very serious and grave position, and I put this Motion on the Paper because I want to see something done in the interests of these miners and their wives and families. I have dealt throughout with this matter as a business proposition primarily, but I know perfectly well that it is not entirely a business proposition, that there is a human side to it; and a very tragic human side it is. I know something about the sufferings which have been caused by unemployment, by irregular employment, and by low wages. This problem of the export of coal is one of the problems of the devastated areas, which are nearly all in the districts where we export coal, and I ask the Government to consider this matter, because it arises not only in our constituencies; in the very constituency of the Prime Minister himself the pits are working most irregularly, little more, I am told, than half-time, and I ask the Government to consider the matter, not only as a business matter, but to visualise the great mass of suffering in those areas and, by prompt and effective action, to do something to alleviate the situation.

8.34 p.m.

Mr. CLARRY: I beg to second the Motion.
I think the thanks of the House are due to my hon. Friend the Member for Consett (Mr. Dickie) for bringing this vital matter forward for discussion, and we very much appreciate the detailed and forceful manner in which he has put his case. I do not propose to speak at any great length, but I would like to crystallise the position and the seriousness of it. Coming from one of the largest exporting areas in the country, South Wales and Monmouthshire, and representing Newport, which is the port of shipment of the Monmouthshire coalfield, it is a matter of very vital and urgent importance to us, and representa-
tions have been made to me which, in passing on to the Minister, I cannot urge with too much forcefulness. When Part I of the Act was originally discussed, its purpose was stated to be to adjust the supply of coal to the current effective demand and to deal with the dead weight of from 60,000,000 to 80,000,000 tons excessive capacity available in the country. At the same time, the Minister made it clear on the subject of prices that, in granting to the coal industry the power to impose minimum price schedules, it would provide the industry with the necessary revenue to maintain wages and to secure a reasonable profit to the owners.
It will not be denied that these two objects have not been achieved. It is true that progress has been made in the stabilisation of prices, although the effect of the Act in this respect is controversial. The fundamental point is that pithead prices during the operation of Part I are actually lower than in 1930–31. Meantime, the costs of production, in which the cost of the administration of the scheme bears some important part, have helped to keep up costs when other competitive industries have been able to reduce their costs of production. With regard to exports, which is the real subject of this Motion, during the three years our exports have fallen from 60,000,000 tons to nearly 39,000,000 tons. Of that quantity, South Wales and Monmouthshire exports have fallen from 24,000,000 to 16,000,000, or by 331 per cent. It is idle for anyone to argue that this is entirely due to the operation of this Act. There are many other causes. There is the much fiercer competition by foreign exporters. There is a world depression, and of course there is the operation of quotas from three countries—France, Belgium and Germany—while Spain is endeavouring to enforce some form of quota but the rest of the world is free and unrestricted.
If we make comparisons in the realm of the world export trade, we find that Great Britain has suffered more during the operation of this Act than the other five important exporting countries. Great Britain's exports during this period have fallen 35 per cent., while the exports of the other five countries have fallen only 28 per cent. This is a very serious matter, and, if we were to calculate the
quantity of coal we should have exported last year if we had been able to maintain the same pro rata export as our foreign competitors, it would represent 5,000,000 tons of coal, and it is not too much to say that this loss is mainly due to the operation of Part I of this Act. It might be argued that if we had to sell this 5,000,000 tons of coal, it would have to be sold at a lower price than the present prices, which in some cases are uneconomic; but against that we have to offset the lower cost of production due to the larger outputs of the collieries.
I have no need to stress the necessity for exports from this country in order to assist our trade balance and the importance of coal to shipping, because, in spite of the reduction in the tonnage of shipping, coal still forms four-fifths of the total weight of tonnage exported from this country, and approximately two-fifths of our ships are bunkered by our coal. When we came off the Gold Standard it was felt that it would be a great opportunity for our exporters, particularly coal exporters, but the operation of the quota and price fixation has practically nullified that advantage. Foreign exporters are aware of the quotations which are made in competitive markets and are able to quote only a fraction of a penny less than we quote in order to obtain our business.
Coal is very often sold, particularly abroad, because of its description and fitness for special purposes, and numerous cases can be cited where exports of coal have been lost to this country because the particular colliery that can supply the customer's particular requirements has used up its quota. While these points apply to all exporting areas, I submit that it has a particular bearing on South Wales and Monmouthshire, which is a very distressed area, and the indirect operation of this Act has been a, means of diverting Monmouthshire coal, which would be normally shipped at Newport, to other ports. This is a subject of strong representation from the Newport Chamber of Commerce, together with the condemnation of Part I of the Act. Strong representations have also been made by the Association of British Chambers of Commerce and the Chamber of Shipping to end export restrictions. In the search for measures to find work to relieve the
heartbreaking unemployment in our distressed areas, I submit that we have a means here at hand for increasing work in our coalfields, railways, docks and shipping by giving back to the exporting and bunkering coal trade the freedom which was taken from it by the operation of this Act.

8.43 p.m.

Mr. GEORGE HALL: I beg to move, in line 1, to leave out from the word "That" to the end of the Question, and to add instead thereof the words:
 This House approves the action taken to continue Part I of the Coal Mines Act, 1930, for a further five years, and urges the necessity for a strict supervision of the operations of the district committees in order to ensure the effective administration of the law.
Like my hon. Friend who moved the Motion, I represent a mining division, but, unlike him, I ask for a continuation of Part I of the Act. I ask that because I think that it is in the interests of the mining industry that it should be continued. My hon. Friends and I are not going to argue that Part I of the 1930 Act is perfect. It is not perfect, and we should like to see some alteration, but we think that the people who should bring forward suggestions for the alteration of that Act are the people who are directly connected with the industry. I am tempted to ask my hon. Friend on whose behalf he is speaking. Is he speaking on behalf of the Mining Association of Great Britain?

Mr. DICKIE: Most assuredly not, and I very much resent the insinuation. I am speaking here as a Member of Parliament representing a mining division—the owners, the miners, the railwaymen, the postmen, the grocers, and everybody else in the constituency.

Mr. HALL: I have no desire to impute motives to my hon. Friend, but on a Motion of this kind I think it is only fair that we should know whether representations had been made to the hon. Member by the various associations connected with the industry asking him to advocate the repeal of Part I.

Mr. DICKIE: I have had the usual things which are sent to every Member of Parliament when a Motion of this kind is to come before the House—from coalowners, from exporters and from
chambers of shipping and other organisations which are interested; just the same as every other hon. Member has.

Mr. HALL: I also have received the usual circulars, but not one from the Mining Association, not one from the Miners' Federation, not one from a large producer of coal. From exporters—yes; from chambers of shipping—yes. We say that while the machinery of the Act is not perfect it embodies means whereby representations can be made for the purpose of tightening up the Act. My hon. Friend suggests that there are evasions of the Act. There are evasions, but that is not the fault of the Act but of the people who carry on the evasions. For my hon. Friend to suggest that Part 1 is driving honest business men to practices which they detest does not speak very well for the honesty of the mineowners of this country.

Sir ROBERT ELLIS: The hon. Member did not say that of business men.

Mr. HALL: But that must be the inference. It is the mineowners who are responsible for administering the Act. The whole machinery of the Act is entirely in the hands of the owners.

Mr. McKEAG: Surely the hon. Member realises that they have been doing whatever they could to find work for their own men.

Mr. HALL: If they deliberately break an Act of Parliament instead of endeavouring to fix the minimum price at which coal can be sold, it does not speak too well for them or the way in which they conduct their business. The point I want to make is, that if there are complaints against the Act, the whole machinery of the Act is in the hands of the owners themselves. That applies to the central committee and the district committees. No other body or organisation has any representation upon district or central committees. The number of complaints received about the administration of the Act is almost negligible. I will deal with the question of the quota. In the excellent report by the Mines Department on the working of the Act, issued towards the latter part of last year, they state, with reference to quota allocations:
 In only comparatively few cases has it been necessary for applications to the central council for increases in allocations to
be referred to arbitration. During the first three months of 1932 there were only two such references.
Where are all the complaints about difficulties arising as the result of the allocation of quotas? My hon. Friend suggested that it is hardly logical to refer to allocations and output. It is interesting to note, according to this report, that in the first quarter of 1932 the actual output of coal was 15.7 per cent. less than the quotas allocated. In the county of Durham in the same quarter the coal output was 19.3 per cent. less than the quotas. In the June quarter the output was 8.6 per cent. less than the quotas and in the September quarter 16,23 per cent. less. Where are the mineowners sitting in their offices making 1s. 6d. a ton as the result of selling their quotas—just sitting at the telephone? Some of the statements made by my hon. Friend were almost unbelievable.

Mr. DICKIE: rose—

Mr. HALL: My hon. Friend took 50 minutes for his speech, and as this Debate will have to close at 11 o'clock he might give me an opportunity. As far as I know, my hon. Friend is not representing any organised body, either the Mining Association, the Durham Mining Association or the Miners' Federation of Great Britain. He may pay lip service to the question of the minimum wage for miners, but those of us who have had experience in negotiating the wages of miners know that without minimum prices they cannot get minimum wages. My hon. Friend is asking for unrestricted competition, yet we know that right along from 1921 until 1930, when the mineowners had unrestricted competition, the price of coal fell to 50 per cent. of what it was and the wages of miners fell to the same extent. The condition of the industry became very much worse under unrestricted competition, yet my hon. Friend is asking for a return to unrestricted competition. That would inevitably mean wages very much lower than those which are being paid at the present time.
We have had a shrewd suspicion, as the hon. Member for Newport rightly said, that chambers of shipping and exporters are, of course, pressing for the repeal of Part I of this Act. If there is any body of people who have made money out of the export of coal it is
exporters and chambers of shipping. The exporters can always live and the producers can always starve. The late Lord Rhondda, who was not only a coal producer but was an exporter, always maintained that he could make more money out of selling coal than out of producing it, and what exporters are concerned about at the present time is not so much the price at which coal can be produced as the commission they can get out of the selling of the coal irrespective of the price at which it is being sold.
As I have already pointed out, the organisation of the industry under Part I of the Act is entirely in the hands of the coalowners. They control the whole machinery, district and central. Mr. Archer, the chairman of the Export Committee of the Midland Amalgamated District, said recently that it was the duty of owners to operate Part I honestly and sincerely, and after they had tried to operate it in that way then, if they failed, they could inform the Government that they had been set a task which could not be performed. The coal-owners, however, were obviously unable to take that line. Despite some of the criticism, the majority of them would regard the repeal with dismay. That is the attitude of the Mining Association—not that I want to appear here this evening as an advocate on behalf of the Mining Association. That is the attitude of the Miners' Federation. I am speaking on behalf of the Miners' Federation. This Bill does not satisfy us entirely, but it is better than the unrestricted competition which would arise if the Motion of my hon. Friend the Member for Consett were carried. Mr. Lee, Secretary of the Mining Association of Great Britain, put the position of the coal industry from the owners' point of view quite clearly, in the article which he wrote in the "Colliery Year Book" for 1928. He said:
 The surplus of productive capacity over present demand, both in the inland and export market, has brought down coal prices far below the general level of prices. They have reached a point at which the economic operation of collieries is impossible and the capital resources of the industry are being gravely impoverished. As is well-known, schemes for co-ordinated action with a view to securing more economic relationships between costs of production and prices, are already under consideration in most of the large coalfields.
That was under a Tory Government in 1928, before there was any suggestion of the introduction of the Bill which brought about the Act of 1930. Mr. Lee further said:
 Concerted action of this character is vitally necessary, not only to maintain the rates of wages of the mine workers in fair relation to those in other industries, but to avert the most serious danger to the very fabric of the industry during the abnormal period through which we are passing.
Those were the words of Mr. Lee. It can be said of Mr. Lee that he knows his job. He knows the industry very well. We say that the condition of the industry is very much what it was in 1928, when Mr. Lee penned those words. The hon. Member for Consett referred to the fact that the present Secretary for Mines opposed the Act when it was passing through the House in its early stages. The President of the Board of Trade did likewise, and so did the late Secretary for Mines. When they were brought close up against the problems with which the mining industry was and is confronted, they saw that their attitude during the period when the Bill was passing through the House was wrong.

Mr. E. BROWN: If the hon. Gentleman will search the Official Debates, he will find that my objection was not so much to the case made out, but to the machinery which is now being discussed.

Mr. HALL: I remember the Debates and some of the speeches. I have here some of the speeches of the hon. Gentleman the Secretary of Mines. He will have an opportunity to deal with them later. I well remember some of the speeches which were made with regard to the tremendous increase of prices which was going to take place as a result of the operation of Part I of the Act. The increase of prices has not been brought about. There is a stability of price for which the mining industry is profoundly thankful. I am not going to quote figures other than from the export prices in 1929, to show that the price for coal exported from this country was 16s. 14d. per ton. The average price in 1932 was about 15s. 11d. per ton. There has been very little fluctuation. I am surprised that hon. Members who support this Motion are always asking, not only for stability of price, but for an increase in the price, to deal with unemployment.
The hon. Member for Consett is asking that we shall not have this stability of price in the mining industry, but that we shall have a reduction of price so that we can capture the market. That has been tried, and it has failed. I have already referred to the statement which was made by Mr. Archer, who knows questions of marketing. I am not going to take up the time of the House in quoting some of the statements that were made in the course of Mr. Archer's speech. I ask hon. Members to take the trouble to read the speech, which is published in some of the technical journals. The case for Part I and for some of the Amendments to Part I of the Act has been very well put.
The hon. Member for Consett really asks for the repeal of Part I of the Act, as far as the export trade is concerned. He, like myself, represents an exporting area in this House. He represents Durham and I represent South Wales, two districts which are, we can say without exaggeration, almost entirely dependent upon the export of coal. I take a good deal of interest in the export trade. It is, as the hon. Member for Consett rightly pointed out, a vital part of the trade and industrial life of this country, from the point of view of employment. If you destroy your coal export trade, you at once throw 200,000 workers out of employment and, in addition, all those who are engaged in the ancillary occupations upon railways or docks, or as seamen. My hon. Friends who come from the mining districts would not do a thing in any way to injure the export trade of this country. We are of opinion that the nation does not take the interest that it should take in the export trade. We hope that the coal industry, that portion which is producing for inland purposes as well as that which is producing for export, should be treated as one economic unit.
The hon. Member for Consett is asking in his Motion to give all the advantages, if there are any, of Part I of the Act, to inland districts, and to take away from the exporting districts any advantage that there may be. That is making the gulf very much further, instead of endeavouring to bring the exporting and the inland areas very much nearer. What a contrast to what is taking place in Germany, one of our main competitors, where the whole industry is organised for
the purpose of competing with us in those neutral markets. Not only are the inland and export coal industries in Germany and Poland acting together, but they have the support of the Government, which is very heavily subsidising the export of coal. Those Governments realise the importance of the export trade to the national life of the country. Figures have been given by the hon. Member for Newport (Mr. Clarry) and the hon. Member for Consett as to the loss of export trade. They did not give the figures for last year, and they made no comparison between the percentage loss of export trade in this country with the percentage loss of export trade of other countries which are our main competitors. I will give the figures.

Mr. CLARRY: I gave those figures, namely, 33 per cent. for this country and 25 per cent. for the other five countries.

Mr. HALL: I understood that those figures covered a period of three years.

Mr. CLARRY: Yes.

Mr. HALL: I want to speak about last year as compared with 1931. The loss of export trade by Great Britain to foreign countries last year was less than 9 per cent., whereas in the case of Germany it was about 22 per cent., of Poland 28 per cent., Belgium 32 per cent., Holland 28 per cent., and the United States 27 per cent.

Mr. CLARRY: That was in one year only.

Mr. HALL: Yes, but it was last year, in reference to which my hon. Friend deplored the fact that there has been this terrible loss, which we all deplore. May I call the attention of my two hon. Friends and of the House to the real cause of the difficulty with which the export coal trade of this country is confronted? Reference has been made to restrictions, which have been aggravated very largely as the result of the fiscal policy of the present Government. Coal has been the pawn in the fiscal war that is being waged at the present time. I shall endeavour to prove that statement.
Which are the best customers of this country for export coal? There is an idea that coal exported from this country is being sent to the furthermost parts of the earth, but, instead of that, it is our near European neighbours that are our
best customers. In the year 1930, when we exported 54,800,000 tons of coal, one ton out of every four exported from this country went to France; 12,969,000 tons of coal left these shores for France. Italy took over 7,000,000 tons; Germany nearly 5,000,000 tons; and Belgium nearly 3,500,000 tons. These four countries, in 1930, took more than half the total amount of coal exported from this country, and, if we add the Irish Free State—where there is a very heavy duty at the present time—and Spain, 32,500,000 of the 54,000,000 tons went to these countries, which have now restrictions and duties against us. The same thing happened in 1931. Of the 42,000,000 tons of coal which we exported in 1931, nearly 26,000,000 tons went to these five countries. In 1932, of the 38,000,000 tons of coal that we exported, 20,800,000 tons went to these countries. All of these nations now have restrictions in the form of quotas or very heavy duties, and that is, to a large extent, the cause of the suffering in the exporting areas of this country.

Mr. SLATER: May I ask the hon. Member if these countries are justified, in view of their favourable balance of trade with this country, in imposing restrictions against our export coal?

Mr. HALL: I am not going to justify anything; I am simply stating facts, and I am sure the hon. Member does not doubt the facts. In the year 1931, our export trade suffered a reduction of nearly 16,000,000 tons as compared with 1930. The reduction in our exports to France, Italy, Germany, and Belgium accounted for 10,500,000 of the 16,000,000 tons, and, again, adding Spain and the Irish Free State, the loss in the case of these countries amounted to nearly 12,000,000 tons. Last year, as compared with 1931, showed a reduction of nearly 4,000,000 tons in our export coal trade. The reduction in the case of the four countries France, Italy, Belgium and Germany, accounted for 4,500,000 tons, or 500,000 tons more than our total loss of export trade for that year. Adding again Spain and the Irish Free State, we account for losses of over 5,000,000 tons, or almost 1,500,000 tons more than our total loss during that year.
My hon. Friend spoke about further reductions in prices. Does he or anyone else imagine that it is only a question of reducing prices in the face of the re-
strictions which exist at the present time? He may refer to the Scandinavian countries; he may refer to the market in Poland, and in Denmark, Norway and Sweden. I know that those countries took a larger percentage of coal from Poland and Germany during last year and recent years than they did previously, and there is no justification for that in view of the trade balance between them and this country; but, if we had the whole of the trade which Germany and Poland now have in those three countries, Denmark, Norway and Sweden—if we had sent them the whole of the coal that they required last year—it would not make up for the loss of our export market in the four countries to which I have already referred.
I am not going to deal with the question of restrictions, although it has been referred to—French, Belgium and German restrictions—but I would like to ask the Secretary for Mines if he will, when he comes to reply, give, not only the House of Commons, but the coal industry generally, an idea of how the negotiations with these other countries are proceeding. We heard some time ago that tariffs were to be used as a bargaining weapon. I want to say—I do not mean it in a personal sense at all—that, if any industry in this country has been treated in a brutal and callous fashion by the present Government, it is the coal mining industry, and especially the export trade. It is no use those who went-to Ottawa and negotiated the Ottawa Agreements coming here and saying that they brought back orders for an additional 100,000 or 200,000 tons of anthracite coal. The quality and price of Welsh anthracite coal almost demand a market for it. It is the one bright spot of the British coal industry, and it was so before the Ottawa Conference, because it was the one part of the British coal mining industry whose post-War output exceeded the pre-War output. I would also ask the Secretary for Mines to give us an idea when the Italians are likely to place the additional order for 1,000,000 tons of coal under The Hague agreement, from which South Wales has benefited so much. Already 2,000,000 tons have been sent, and there is an additional 1,000,000 tons waiting; and we are anxious that that order should be placed in South Wales as soon as possible.
We say quite frankly that there are defects in Part I of the Act. It has been shown that the Act has succeeded in maintaining some degree of stability in particularly difficult circumstances, but it has not succeeded in its main object, which was to fix such a price for coal as would give a proper standard of living for the miners, and, may I say, a fair margin of profit to the owners. Its failure must be attributed to some extent to the absence of proper co-ordination of prices between the districts. The mere fixing of minimum prices on a district basis tends only to substitute inter-district competition for individual competition, and it has been proved that this inter-district competition can be as severe as it was before the Act came into operation. The owners have endeavoured to co-ordinate district prices, but up to the present they have not succeeded. I understand that they have, at the request of the hon. Gentleman, who invited them to consider the defects of the Act, made representations that there should be some co-ordination on this question of district prices. The Miners' Federation also asked that this should be done, and I am sure my hon. Friend has read the very excellent memorandum issued by the Miners' Federation in the early part of last year. May I ask what the Minister is doing in regard to this matter. It is a long time since the owners made the representation to him. The Central Council has no power to fix prices itself, nor can they amend the prices fixed by a particular district. We claim that the central body should be given statutory powers to regulate the level of prices on a national basis. Unless this is done, there can be no assurance of effective co-ordination throughout the industry.
Then those of us who come from the exporting areas—we mention this question of the national levy with fear and trembling—believe that there should be complete co-ordination between the inland and the export trade. That is being done in those countries which are our chief competitors. Take, if you like, Poland. It can truly be said that Poland has virtually nationalised her coal-mining industry to enable her to deal effectively with the question of her export trade. She is able to compete with us for that reason, that the Government are heavily subsidising her export trade as they
recognise the importance of that branch of the trade. Then, if amendments are to be made in Part I, we claim that, in the interests of the industry and of the workmen, representatives of the workmen should be allowed to share with the owners the responsibility for the control and the direction of the schemes, for the wages and conditions under which the workmen are employed almost entirely depend upon the price that is paid' for the coal produced, and, therefore, it is but natural and equitable that they should have a voice in the fixing of those prices. We think that the participation of the representatives in the direction of the industry would prevent unnecessary controversy and delay and give that rapidity of decision and action upon which business so largely depends. After all, the representatives of the workmen are men of knowledge and experience of the industry who would be able to make a genuine contribution to the solution of the difficulties with which the industry is faced.
We think the Act could be strengthened so that in the inland trade a minimum delivered price should be fixed for various classes of coal in prearranged zones and so that coal is not sold in any zone below the price fixed for the particular class of coal in that zone. If properly co-ordinated and carried out, this would ensure that, as far as possible, each zone would supply its natural market and that collieries outside a particular zone would supply that zone only with coal which could not be produced from collieries within that zone. Part I has been in operation for two years of exceedingly great difficulty in the mining industry. We think it has more than justified itself. It could be strengthened as I have suggested. It should then be continued. To-day more than ever before the circumstances of the industry require that the principles of regulation and co-ordination should be rigidly applied, for to-day the surplus of productive capacity over present demand is greater than ever before. We claim that a return to the old conditions of free competition would be disastrous to the coal industry and to the country. We go further and claim that it is only by the European application of some such organisation that the coal export trade can be saved and a strong national organisation in this country, which is
after all the chief producing country in Europe, will be a preliminary and necessary condition of an international or European organisation.

9.20 p.m.

Sir ADRIAN BAILLIE: I desire to support the case against the continuation of Part I of the Coal Mines Act. I have listened with considerable interest to the speech which we have just heard, and I am sure that many of the arguments that the hon. Member used for the continuation of Part I and its application to the export trade will have impressed the House, and possibly even the Secretary for Mines. He suggested, however, that the hon. Member for Consett (Mr. Dickie) was proposing the abolition of Part I in order to allow of unfettered competition in the industry. If that is the hon. Member's intention, it is not mine. I merely suggest that the restrictions imposed by Part I are not the right sort of restrictions. We were told by the Lord Privy Seal that we should not be surprised, but I was surprised until I heard the hon. Member, representing a constituency chiefly employed in the export of coal, drop the remark that Welsh anthracite demands a market. If you happen to be favoured, it is suggested that Welsh anthracite demands a market.

Mr. CLARRY: It is 40 miles away.

Sir A. BAILLIE: I shall be excused for not knowing the geography of that part of the country. It will be sufficient to recall the situation that occurred in the December quarter of last year, affecting the Lothian Coal Company, which had to post up notices restricting the working week to three days when all the time they had on their books orders for coal for Scandinavia. The only reason why they could not fulfil them was because they had exhausted their quota. The Scottish district had exhausted its quota, and there was not a quota available to purchase. West Fife was in the same position. To pile up injury upon injury, the company had to pay a fine for failing to fulfil their obligations. An example such as that ought to have been sufficient to convince even the most ardent supporters of the regulation of the output of coal in. this country that the particular form of regulation contained in Part I of the Coal Mines Act, 1930, is at least no better than the
curate's egg. When the Government interferes in such an industry as the coal mining industry, with its ramifications and its variety of conditions, interests, and requirements, then that Government or its successor should not rest content with legislation which, while admittedly satisfactory to a large part of the industry, is certainly most unsatisfactory to a minority of that industry, and a very important minority in that it is engaged in the export trade of this country.
By whom was the Act drawn up? By the late Socialist Government. Why was the Act framed and what were its objectives? I find them stated in the memorandum, which has already been referred to, which was drawn up by the Miners' Federation explaining away the Act. It states in the opening paragraph the objectives as follow:
 Part 1 of the Coal Mines Act, 1930, was designed to check the evils of unrestrained competition between the numerous units of the coal mining industry. Such competition has always been a source of weakness to the industry and a big factor in lowering its economic position.
I have very little doubt that the framers of the Coal Mines Act, 1930, might have hoped that the Act would be a steppingstone towards nationalisation, which they always advocate on every platform but which, thank God, they have never yet been able to reach. As to their reference to unrestrained competition as a big factor in lowering the economic position, then, if nationalisation is to be the only alternative, experience shows that nationalisation has never succeeded in raising the economic position of the coal mining industry. Hon. Members will all agree that cut-throat competition is to be deprecated. If, however, it is a question of supplying co-operation instead of cut-throat competition, of supplying lubrication instead of friction, I agree, but I say that that co-operation must be based on common-sense principles, must have the willing consent of the co-operators, and must bear in mind the real interests of those concerned.
My claim and my indictment are that Part I and Part II of the Act of 1930 entirely ignore the conditions which are pre-requisite to healthy co-operation. I am supported in this, as far as I can make out, by Sir Ernest Gowers, the Chairman of the Coal Mines Reorganisa-
tion Commission. Speaking recently in Cardiff, he expressed considerable doubts as to the proved value of recent large amalgamations and combines, and added:
 Voluntary amalgamation represents an organic growth, whereas compulsory amalgamation is a surgical operation.
It is an operation which unless the Ministry of Mines or this Government will intervene, will shortly take place in Scotland. It may be termed a surgical operation, but where is the anaesthetic? It will be vivisection by surgeons who, while very highly paid, are, so far as I know, inexperienced if not inexpert. I hope that, if the Government cannot intervene to stop this form of industrial brutality, they will at least see that these surgeons will only use the knife of fair play and common sense.
To return for a moment to the framers of the 1930 Act, it will not be uncharitable to assume that they and the Socialist Government were imbued with the laudable desire to protect the wages and the employment of the men in the coal mining industry. Let us see how far they have been successful. I agree with the hon. Member for Consett that all the recent troubles in the coal mining industry cannot properly be put down merely to the Coal Mines Act, 1930, but has that Act been successful in protecting the wages and conditions of employment in the industry? Speaking as to the export situation alone, I cannot give a single case where, as a result of the provisions of that Act, one miner has benefited. On the contrary, we have had the case of the Lothian Colliery Company which I quoted in my opening remarks. I am not exaggerating when I say that, since the Coal Mines Act, 1930, was introduced, 150,000 miners have lost employment. In December, 1932, there were 53,000 fewer miners on the colliery pay rolls than at the beginning of 1932, which again supports my argument. In the December quarter of 1932, on the other hand, the Scottish district was short of quota—and I would draw the attention of the hon. Member for Aberdare (Mr. G. Hall) to this—by 450,000 tons.

Mr. G. HALL: May I call the hon. Member's attention to the fact that almost every other coal-producing district in the country is at variance with Scot-
land because the Scottish owners are fixing the minimum price of that coal so that they are able to bring coal, which really ought to be used for export, inland arid sell it there? They bring it into Lancashire and Yorkshire. If Scotland would export their coal, which they ought to export, at a proper price, then they would not compete and take the coal from some of the other localities.

Sir A. BAILLIE: I am entirely unimpressed. My whole argument is—

Mr. KIRKWOOD: Is it true?

Sir A. BAILLIE: If in Scotland, as I believe to be the case, the Scottish collieries are so efficiently organised that they can sell their coal in Lancashire at a lower price than the Lancashire collieries, I have no objection. If my hon. Friend's complaint is that the minimum prices are so low in Scotland that they affect the miners' wages, then one has to look a long way to find a higher level of earnings than that in the Scottish coal mining industry.

Mr. DUNCAN GRAHAM: I ask the hon. Member if he will be good enough to give any evidence to justify the statement that he has now made, that the wages in Scotland are higher than they are in any other part of the country? May I further call his attention to the fact that, because of the black-legging tendencies of the Scottish coalowners, they have to work a considerable number more days per year than in any other district in the country. Take the day wage—

HON. MEMBERS: Speech !

Sir A. BAILLIE: Again, that interruption only goes to confirm what I was saying. I was talking very specifically about the annual earnings, and if the hon. Member who chose to intervene just now likes to put forward the case that it is better to work fewer days in the year than more days in the year, I will give him a present of his own argument. As I was saying before I was interrupted, in the December quarter of 1932 the Scottish district was short of quota by 450,000 tons. With this position facing them, Scottish coal exporters were obliged to withold quotations. There was a definite loss of orders, but what was much worse than the loss of orders was
the loss of confidence of the foreign buyer in the ability of the Scottish coal owners and exporters to deliver the goods. It has been argued to-night—it is very often put forward by the protagonists of what I consider is a monstrous piece of legislation—that a district can quite easily apply to the Central Council for an extra allocation. But hon. Members must realise that in order to obtain an extra allocation a district has to put forward a very good case, and that takes time, and when that time has elapsed the damage has been done. That was the case in the December quarter of 1932 in the Scottish district. On 17th November they made application to the Central Council for an extra allocation of 450,000 tons. Consideration of the application was deferred until 24th November, when only after severe opposition from the Midland districts they were allocated 300,000 tons. As I say, by that time the damage had been done and orders had been lost. It is this lack of elasticity in the operation of those restrictions which is one of the most vicious features of this legislation. I submit that it is not beyond the perspicacity of the Secretary for Mines and the Government to realise that the operations of the quota, as far as exports are concerned, have been, and inevitably must be, to the detriment of that part of our great industry.
There is only one other point I desire to make. Reference was made just now to the question of costs. I am entitled, I think, to assume that it was hoped, through the provisions of Part I of the Act, to raise the price of coal to the consumer. I make no objection to that at all. But what happened in point of fact? In the month of October last year the average cost of production had gone up as a result of those restrictive provisions by 1s. a ton, and the average selling price in October was down by 1s. ld. a ton. There is a colliery very near to my home in Scotland, a young and efficient colliery, where they have a capacity output of 3,000 tons a day. Their standard tonnage is estimated at 2,000 tons per day. Even with the extra allocation which was accorded tc Scotland in the last quarter of 1932, that colliery is given only 77 per cent. of its standard tonnage.

Mr. D. GRAHAM: Will the hon. Member name the colliery?

Sir A. BAILLIE: I will. The colliery is called Polkemmet.

Mr. GRAHAM: rose—

HON. MEMBERS: Order!

Mr. KIRKWOOD: It depends who is speaking. If we happen to make an interjection we are out of order.

Mr. DEPUTY-SPEAKER (Captain Bourne): The hon. Gentleman has not given way.

Mr. KIRKWOOD: They do not know the Rules of the House.

Sir A. BAILLIE: Perhaps I may proceed, with my hon. Friend's permission. I have named the colliery. I am only desiring to prove that even with 77 per cent. of its standard tonnage it really means that that colliery is limited to the production of 1,540 tons a day when it has a capacity of 3,000 tons. In other words, it is very little over 50 per cent. of its capacity.

Mr. D. GRAHAM: Is it true?

Sir A. BAILLIE: Is it reasonable to ask a new, developing, efficient colliery like that to be restricted to 50 per cent. of the capacity of its production? I am supported by the Chairman of the Reorganisation Committee, Sir Ernest Gowers. Referring to quotas, he says:
 A quota system which swells the costs by making every mine work below capacity cannot be a lasting remedy.
My personal feeling is that coal for export markets should, as far as possible, not be subjected to the quota. I entirely agree that there must be regulation of the output of coal for the home market, but I suggest that the quota system is not the right way to restrict output. I submit to the Minister that if curtailment is required—and I believe curtailment of production is required—it should be effected, again as hinted at by Sir Ernest Gowers, by the closing down of pits where the costs are uneconomic. That having been done, the pits with low costs should be allowed to produce to capacity. Finally, I believe that it would well repay coalowners in this country to get together and subscribe to a fund for the temporary closing down of pits with uneconomic costs. Whether they were closed permanently or temporarily would be of no real importance.
I said "temporarily" because of the possible increase in the demand for coal in the future. I beg of the Secretary for Mines to reconsider the case we are putting before him. I ask him to reconsider it, advisedly, because we have knocked at the door of the Secretary for Mines for many months now. We are entitled, at least, to some form of reconsideration of the case we are putting before the House to-night.

9.45 p.m.

Mr. ROBINSON: I do not rise to Debate the general question but to refer to a matter raised by the hon. Member for Aberdare (Mr. G. Hall), namely, the determination of minimum prices under the Coal Mines Act, 1930. The hon. Member for Linlithgow (Sir A. Baillie) was not impressed by what was said by the hon. Member for Aberdare, but if he will be so kind as to listen to the remarks I have to make on the subject he may perhaps get a better impression of one of the great difficulties of the coal-mining industry. As I see it, the position is this. By Section 3 (2) of the Coal Mines Act, minimum prices are to be fixed in respect of each class of coal produced in a district. There, I think, is a fault, because the executive boards administering the district schemes can fix those minimum prices at whatever levels they wish. It seems to me that very grave difficulty arises here, because unless there is a very great amount of good will between the districts a very complex problem is bound to arise.
Right from the first there was a certain amount of difficulty with the Scottish Board. The Scottish Board failed to prepare any schedule of minimum prices, and there is no doubt that considerable pressure was required from the Central Council before a Scottish minimum price was determined. There has been still more difficulty. The Scottish people had lost a good deal of their export trade, and they looked around to find some other place where they could make up for it. In order to back themselves up in this matter they fixed their minimum prices at a level which had absolutely no relation whatever to the actual values or to the cost of production.
I wish to urge upon the Government and upon the Minister the necessity for providing some scheme whereby minimum
prices in the several districts can be co-ordinated, in order to eliminate unfair competition. I will bring to the attention of the House one concrete case to show what can happen. For many years the Lancashire coalfield have supplied the electricity department of the city of Liverpool with its coal. The Lancashire coalfield is, of course, at the very gate of Liverpool and anxious and eager to supply it with the whole of its requirements. Last year, however, the city of Liverpool went to Scotland and bought her coal. She got 200,000 tons of coal for her electricity department from Scotland. Our complaint is that the price which Liverpool paid for that coal was actually less than the minimum price fixed by the Lancashire district. Not only that, but the price paid must have meant a loss of shillings per ton to the coalowners who sold that coal. If you add the cost of the freightage from Scotland to Liverpool, much more loss must have resulted. I am certain that if such a situation had arisen owing to the action of a foreign country and coal or any other commodity had been sold here at a heavy loss like that, every Member of this House would have been up in arms against a flagrant case of dumping.
I want to take this opportunity of considering what this situation means to the city of Liverpool. They saved £20,000. They saved one-fiftieth of a penny per unit on the electricity they sold—a very small amount—and what is important is that it did not save them from any deficit, because the Liverpool Electricity Department has been making money for years, but that they were just seizing this opportunity of making an extra profit at the expense of the Lancashire coal mines. This action of Liverpool meant that the Lancashire district lost £102,000 more in wages last year, 880 miners were put out -of work, and 220,000 working days were lost, while the authorities of the Lancashire district had to pay out an extra £50,000 in unemployment pay. I think it is a very shortsighted policy not only from the Scottish point of view but from the point of view of the city of Liverpool.
It seems to me a very significant fact that to-morrow that same City of Liverpool is sending a deputation to this House to the Minister of Health asking that the hinterland of Liverpool, the county districts of Lancashire, should
join in trying to find some of the money necessary to maintain the unemployed of Liverpool. It is a very short-sighted policy on the part of the Liverpool Corporation to ruin an industry and to impoverish the people whom they are now asking to support them. I know that they are considering contracting for a further three years' supply from Scotland, and I would ask them very carefully to consider the true position and to realise what their benefit is in the matter. A similar situation has taken place in regard to Southport. Southport has taken 32,000 tons of coal from Scotland, and there has been a corresponding loss of working days in the Lancashire coalfield. Southport depends for 80 per cent. of its income on the very working men in Lancashire whom they are depriving of their jobs. At the present time in Lancashire we are starting efforts to create a better industrial situation and the miners and the coalowners are uniting in a propaganda campaign with the slogan: "Lancashire coal for Lancashire people." Why not "Lancashire coal for Liverpool people?"

Mr. DENVILLE: Will the hon. Member explain to the House whether Liverpool went to Scotland to get her coal, so that she could break the ring of Lancashire coalowners?

Mr. LOGAN: Will the hon. Member explain to the House that Liverpool is controlled by Members of the National party?

Mr. ESSENHIGH: Including the hon. Member for the Scotland Division (Mr. Logan).

Mr. ROBINSON: That campaign of propaganda alone is not enough. The intention of Part I of the Act was to keep up the price of coal so that the industry could be run on a remunerative basis and that revenue might be made to provide decent wages for the men. I would plead with the Government to complete the purpose of the Act by so amending it as to provide means for the co-ordination of prices between the districts and to stop the useless, wasteful, cut-throat competition that is ruining the industry.

9.53 p.m.

Mr. PARKINSON: The hon. Member for Widnes (Mr. Robinson) has brought
the Debate down to actual realities and has dealt with one of the points with which I propose to deal in the course of my remarks. The Coal Mines Act, Part I, was put into operation in order to overcome difficulties which were then operating in the national field. It was designed to check the evils resulting from unrestrained competition between numerous districts of the coal-mining industry, but we have heard sufficient to-night to realise that there are a large number of different units among the coal-owners who are acting with a view to securing their own individual prosperity. Such competition has always been a source of weakness to the industry and has had the effect of lowering the wages of the workers and weakening the structure of the industry.
We seem to forget the fact that the whole of the power with regard to the allocation is in the hands of the Central Council. We find Members of this House railing against the Government for not increasing their quota or doing something in that direction while, at the same time, the Government have not the power to do it. The power rests with the Central Council to do what they think is right in regard to the question of altering the quota. Since the War, new forces have arisen to cause a decline in the consumption of coal for heating, lighting and power, and markets have been completely reversed. Many countries have increased their own production of coal because they think it is best in the interests of their own countries to do so, instead of importing coal from other countries. I have a quotation here from a speech made by the Chairman of the Coal Mining Association of Great Britain, Mr. Evan Williams, who may be looked upon as one of the biggest figures in the coalowners association. He made a very pessimistic statement at the Central Council on 6th October. He said:
 We all know that instead of getting better prices than we did when we began to function under this Act, we are really getting lower prices. This is due to the facts that we have placed more coal on the market than there was a demand for, that we have not been able to co-ordinate the regulation of price as between district and district, and that we have not been able to prevent in the districts the evasions of the
provisions of the schemes which were designed for maintaining prices at a remunerative level.
A more depressing statement could not possibly be made by a man of the standing of Mr. Evan. Williams. It shows the failure of the owners to look beyond individual interests to the well-being of the industry as a whole. It also shows the folly of placing too much coal on the market, and deals with the failure to coordinate prices or to remedy the evasions of the Act. The outstanding fact is that the predatory instincts of individual owners, or of districts, is the predominating feature. Are the coalowners not able to rise above individual interests? Are they not able to develop a collective mind? Cannot they look at the industry as a whole? Powers were given to them under the Act to enable them to restore the industry, to enable it to pull through a, very difficult period. In contradistinction to the statement of Mr. Evan Williams we have a statement from Mr. Archer, the vice-chairman of the West Yorkshire Coalowners. He says:
 The majority of coalowners would, think, regard the repeal of Part I with dismay, and if they do not do so initially they would eventually. The facts prove that the districts which have been really trying to work Part I have benefited, whereas those which have not done so have hurst themselves.
We have heard a great deal about the difficulties which have arisen from the coalowners' point of view and from the exporters' point of view, indeed from almost every point of view. The hon. Member for Consett (Mr. Dickie) told a very dismal story. I do not know whether he was speaking on behalf of his constituents, or whether he was satisfied that the statement sent out by the exporters was meant to be a kind of manifesto for his political extinction at the next general election. I am sure that during the period during which the Coal Mines Act has been in operation we have had a steadier and stronger tendency in the trade than before. We must look at the profits which have been made on the sale of coal during the last few months. I am speaking in support of the retention of Part I. I say that it has been of service to the coal industry and to the country as a whole.
The profit on saleable coal raised in 1931 was 3.2 pence per ton; and it was
practically the same for 1932, though, of course, we have only the returns for the first nine months of that year. The tonnage of saleable coal was 241,000,000 tons in 1927 and 213,000,000 tons in 1931. The hon. Member for Consett tried to make out that a lower output of coal was an offence or crime against the nation. If we produced coal during one year at our maximum capacity we could not export the coal or sell it, and we should find what we used to see 25 years ago, huge stacks of coal at every pit bank.

Mr. DICKIE: The hon. Member must surely know that we have this state of things now. There are millions of tons of small coal lying on the ground, unsaleable.

Mr. PARKINSON: It is in a minor degree to what it was 25 years ago. Then, in every colliery in Lancashire you would find huge stacks of coal waiting for the highest bidder. The costs of production in 1931–32 were practically the same as in 1929–30, but they were substantially below the figures for 1927–28. The average selling price for 1931–32 was in keeping with the price for 1929–30, there was practically speaking only a few coppers difference. The output per man in 1932 increased. The production of coal in 1931 was no less than 13,000,000 tons short of the quota allowed, and in the first nine months of 1932 it was 22,000,000 less. That disposes of the question that it is necessary to have a greater quota in order to meet the difficulties of certain exporters. Workmen's wages, including allowances in kind, were practically the same as they were prior to the agreement.
The hon. Member for Consett made one or two insinuations against hon. Members on this side of the House, but I should like him to realise that, no matter what his experience may be of the coal industry, there are people on this side with equal experience, perhaps a greater experience. The Act was passed in.1930 and the allocations were made to districts. These have been varied on several occasions. Let me quote from a report issued by the Secretary for Mines. On page 5 is stated:
 In fixing total allocations in excess of those in any other quarter when regulation of output was operative, the Central Council doubtless desired to enable the districts to take advantage of any increased demand for coal. Demand continued to decline, however, and output, which fell short of alloca-
tion by 10,111,745 tons (15.07 per cent.) was 1,389,115 tons less than in the corresponding quarter of 1931, and 1,818,756 tons less than in the December quarter, 1931.
The deficiency of the output as compared with the quota in the June quarter was 5.56 per cent., and in the September quarter it was 14.03 per cent. It will be understood, therefore, that. it is not a question as to the amount of coal which has been brought to the surface. There have been opportunities for these people if they had cared to utilise them. 1n connection with price regulation and coordination between districts there has been one of the glaring misapplications of the spirit of the Act. The hon. Member for Linlithgow (Sir A. Baillie) has been speaking about the position in Scotland. I would like to read a short paragraph from page 9 of the same report:
 Before Part I of the 1930 Act was passed, and before minimum prices were fixed, Scottish coal never came into Lancashire. Since the Act was passed, however, the Scottish coalowners or Scottish merchants have exploited the position, and large tonnages of coal from Scotland have been sold in parts of the Lancashire coalfield, depriving Lancashire collieries of valuable orders which they have enjoyed for many years. It would appear to be obvious that the minimum prices of the Scottish coal must have been fixed at a ridiculously low figure. The Lancashire owners feel very strongly that there should he amendments to Part I of the Act to enforce inter-district co-operation.
Lancashire during the last year seems to have been the tipping ground for all the cheap coal of Britain. An hon. Member behind me spoke about a campaign that was being launched. I would tell the House that as much coal is coming into Lancashire from other counties and Scotland as would provide work for 4,000 miners in the Lancashire district. Though the Scottish owners may be absorbing more people in their own area, they are encroaching over the border and causing a large number of our people to be unemployed. The hon. Member for Linlithgow on two or three occasions mentioned the name of Sir Ernest Gowers. I am one of those who think that Sir Ernest Cowers would be doing a better service if he was minding his own business, and if he cannot mind his own business he had better resign his position. We know the circumstances of the appointment, but we do not want the ridicule which he is trying to pour on Part I of the Act to be continued. Really, it is unfair for
such a thing to take place, for a man in his position to publish such statements to the Press or to make them to individuals, and this sort of thing ought to be discontinued.
There will have to be inter-district agreements of a stronger character, and greater morality among the coalowners. It must not be a case of cut-throat competition, but of the widest co-operation possible. The hon. Member for Linlithgow spoke about Scotland being 450,000 tons over the quota during the last quarter of last year. Here are the figures I have: In the first quarter, ended March, 1932, they were 9.25 below the quota in production; in the quarter ended June they were 5.56 below; and in the September quarter they were 10.74 per cent. below the quota granted to them. It is very unfair for anyone to try to lead the House to believe that the Act has undermined the stability of a section of the industry. It has consolidated the industry. It gave to the owners all that they asked for to make their position secure, but they have so little faith in themselves or in each other that they believe they ought to continue a cut-throat competition which will lead them to the end of a very dark career. What is wanted is a better spirit in the industry. The selling side ought to have constant supervision and further reorganisation. Sound schemes for all these problems can be formulated, given the spirit of co-operation and good will among the owners. The only alternative is to drift back to the old bad conditions. The industry needs clear direction, unity of purpose and co-operation for the good of those engaged in it. Failing that, we shall be as we have been before. A return to the old conditions of free competition would be disastrous to the industry and to the country. Let me quote a few words from the League of Nations Report of January, 1932. There it is stated:
 National organisation is the preliminary and necessary condition of international regulations. In 1929 one of the chief obstacles to this idea was the absence of national organisation, notably in Great Britain, the chief producing country in Europe.
We must either go forward with the reorganisation given under the Mines Act, or we must slide back into the abyss of which I have spoken.

10.14 p.m.

Mr. CURRY: In the few minutes that remain I wish to express a point of view which I think has not been expressed so far in this Debate. I find myself not quite in agreement with either the hon. Member for Consett (Mr. Dickie) or the hon. Member for Aberdare (Mr. G. Hall). The hon. Member for Consett has placed us all under an indebtedness by giving us the opportunity for such a valuable discussion on such an important subject. The facts which he brought out and the views to which he and those supporting the Motion have given expression, cannot be brushed aside as the hon. Member for Aberdare tried to do by the simple statement that the administration of the Act is in the hands of the owners. It is a great surprise to me that in the case of an Act which was passed by the Labour Government we should now be told that the men have no voice in its administration. I think that position ought to be noted, because I am firmly of opinion that we shall never have permanent peace in this industry until we give those employed in it an effective voice in the fixation of quota and prices, if we are to go on fixing them.
The hon. Member for Aberdare said that we must move forward to the coordination of the export and inland areas in the country and try to get them to co-operate—as has been done, I understand, in Germany—but he rather misrepresented the hon. Member for Consett by saying that he wanted to take away some of the advantages which exporters were enjoying. The view expressed by the hon. Member for Consett was that the Act is not an advantage, but a disadvantage to the exporting industry, and the facts which have been brought out in this Debate point to the necessity for a proper Government inquiry into the working of this part of the Act. It was with that in view that I put upon the Paper an Amendment which it has not been possible for us to discuss. Much has been said on the benches opposite about the coalowners, and I detected in one or two speeches a note of cynicism in references to the coalowners. But they are not indulging in these evasions out of choice. When we were debating the Coal Mines Act last summer I called attention to a conversation which I had had with a well-known coalowner in the county of Durham who told me that that
week he was writing notices for some hundreds of men, not because he could not sell his coal, but because he would not attempt to sell it underneath the fixed price. All honour to that man. But in that type of man the sense of trusteeship for those whom he employs is highly developed, and it is hard on those men if they have to suffer unempolyment because of their employer's high standard of moral integrity.

Mr. LAWSON: Somebody else would get the contract.

Mr. CURRY: Yes, but if we lose from British industry that sense of honour which is the fine gold of commerce, whether we lose it through the operations of this Act or in any other way—

Mr. LAWSON: Somebody in Durham got the order.

Mr. CURRY: Certainly, but as I say if we allow to be undermined that sense of honour which has been the pride of British industry ever since ships sailed to sea—if we once lose that out of British industry, we shall have lost the foundation upon which our Imperial and commercial greatness rests. If there is even a suspicion of such a loss, then it is no answer—and I am surprised that the remark should come from the quarter from which it has come—to say that somebody else got the order. The fact that a man of the calibre of that owner should suffer economic loss because of the faults of this Act is a mandate to this House and is the strongest reinforcement possible for the request that we should have an inquiry into the working of this Act and discover the facts, and then legislate in the full light of knowledge. We should do away for ever with the sort of debate which we have had to-night in which speakers in different quarters of the House and from different parts of the country, have been giving us contradictory statements of their opinions and of the facts. We can only do it by an inquiry.
I would remind the hon. Member for Aberdare that he pointed out at great length the changes in the world conditions which have sprung up since this Act began to operate. An Act which was passed in 1930 may not be applicable to the condition of things existing in 1933. The year 1931 altered a tremendous lot of the relationships between one market
and another, and we should not go on, in a great industry like this, continuing an Act simply because somebody passed it or simply because it happens to fit in with a certain political faith, when we have direct evidence that it is lowering the moral standard of our commercial people, bringing unemployment in certain areas, leading to inequalities between one county and another, and generally playing ducks and drakes with an industry which is the very foundation of our commercial and industrial greatness.

10.21 p.m.

Mr. E. BROWN: I am sure the House will agree that the hon. Member for Consett (Mr. Dickie) has raised a live issue and an issue of great interest, not merely to this House, but to the country as a whole. The only regret that the House will have is that the time has been so short that a number of Members who would wish to have made their varying contributions, for they would have been varying, have not had that opportunity. I will do my best to be as brief as I can in covering the ground, so that, if possible, when I have done, there may yet be time for some others to speak, but that I cannot promise; I will do my best. The reason I cannot promise is very obvious. My hon. Friend the Member for Linlithgow (Sir A. Baillie) said he was knocking at the door. It might be very simple if all who knocked at the door of the Minister of Mines at this time wanted the same thing, but he wants one thing, another hon. Member wants another thing, a third wants quite a different thing, and a fourth another yet again. They all knock at the door, and they all want different things; and what makes it more complicated is this, that some of them agree with each other about one thing, or two others may disagree with each other about another thing or another two things.
The result is, as the Debate has shown to-night, that this is a very difficult and complicated question, and, as I say, it is a regret that we have not had longer to consider it. Still, we must be grateful to the hon. Member for Consett for seizing the opportunity and, in his own vigorous way, putting his case. He made a quotation from a speech by me, but I think, if he re-reads it, he will see that he does me an injustice, for in that speech, so far from making the point
which he was making, I deliberately stated that I did not make the claim that the quota has anything to do with it. I remember the speech very well. It was the only one of that kind that I made in the course of the discussions upon that Bill, for my objections to that Bill were not objections held by many of my hon. Friends. As a matter of fact, one or two of the objections that I lodged in the course of the Debates on that Bill were sustained, and it is the fact to-day that it is possible to give adequate standard tonnages so that the developing pit can be met, because I proposed an Amendment to the Bill which in substance was accepted and is now part of the Act.
That quotation comes from a discussion two and a-half months after the Act had begun to operate, when there was the initial difficulty affecting every port in the land and, more than that, a particular colliery in South Yorkshire that had a real grievance. The committee of investigation set up to inquire into the change upheld the colliery, and so the Act was found to have the remedy for the objection then raised. If the hon. Member for Consett will re-read the whole speech, instead of looking at one quotation only, he will find that he has done me, of course without any intention, an injustice in that matter. I think, if he will also study the particular speech of the President of the Board of Trade from which he quoted, he will find that it was given in circumstances which are very interesting in view of some of the issues which are now being raised.
Now let me deal with some of the points that have been raised in this Debate. It is true, of course, that we are dealing with the operation of this Act in the present state of the coal industry, and we have to regret that we have seen a contraction in this country. Part of the troubles that we have been discussing to-night do not arise from the structure of the Act at all. They arise from the circumstances in which the Act has to be applied. Most of the Members who have discussed the operation of the quota regulations under the Act have admitted that they do not want to see the abolition of the whole of Part I. It is interesting to notice that the hon. Member for Consett himself is one of those who are inclined to say that there
is a case for the regulation of output and price in the inland market.
I will come back to that a little later, but I point that out now because much of the propaganda that is made against the Act is not based on any discrimination in the operation of either the regulation of output or the minimum price. It is based on the idea that all you have to do if you want to bring back health to the coal industry is to wipe the whole of the Act away. I am glad to have noticed in the Debate that that opinion does not seem to be largely adopted. That atmosphere is sometimes created even by speakers who say in the course of creating the atmosphere that they do not want to sweep Part I of the Act away. Hon. Members will have noticed that in the replies to questions which I have made I have continually told the House that every question asked about a difficulty under the operation of this Act has been analysed in my Department. Every letter that has appeared about the Act, for and against it, containing any material facts, has been analysed, and we have tried as far as we can to trace the allegations made to their sources.
It must have been borne upon the Members who have listened to this Debate that allegations are many, opinions are many, but facts are very few. We had one fact in the course of the Debate in the admirable and eloquent speech of my hon. Friend the Member for Linlithgow. It is a fact concerning a particular group of collieries. It is true, as he says, that there was a short allocation in December, 1932, but I would ask him to notice that there have only been two quarters in the whole period of the operation of the Act when there has been anything like a short allocation, and that was in each case the final quarters of the years 1931 and 1932. In the case he quoted, the case of the Lothian Coal Company, notices were issued. I took some personal interest in it, and I saw the owners concerned. The hon. Member knows quite well that 300,000 tons were first allocated, and then an additional 150,000 tons. I took the trouble to follow the thing up in regard to both West Fife and East Fife, and in regard to Lothian, and I found—[Interruption.] the particular area was concerned with the operations of the Wemyss Coal Company; that is a case which ray hon.
Friend had in mind. He mentioned a case that was in his own area, and I took the trouble to go into the facts. Notices were issued, the propaganda was started, the atmosphere was created, and these are the facts. The number of days worked during the week ending the 10th December in the Whitehill Pit of the Lothian Coal Company were five; for the 17th December, six; and the 24th December, six. In the week in question for which notices had been published, the number was five. For the Polton Pit, in the week ending 10th December, five days; 17th December, six days; 24th December, six days; 31st December, five days. So the notices and the facts do not agree.
With regard to the Newbattle Pit the case is rather different. In the week ending 10th December, five days, one stop day; 17th December, four days; 24th December, six days; 31st December, five days, one stop day. The stoppages came as normal in the first week in January, the New Year Scottish holidays. The practice at this undertaking was to work 11 days a fortnight, six days in one week and five in the other. Apart from the week ending 17th December, when one pit, Newbattle, worked four days, full time, allowing for holidays, had been worked during the period in question. With regard to the export trade, there is not a Member of this House, or a member of the Central Council of Coal Owners, who would put any obstacle in the way of the expansion of the export market or the fulfilment of a single order for export. I am bound to admit that in the course of my inquiries I have had a few cases put before me—cases, not assertions, which I have been able to verify. It so happens that of all the Members of the House I have been most successful in finding them. Two of about 10 were found by me in my own constituency. But when we take these dozen lost orders and compare that figure, which has been proved, with the assertions made in this Debate, the issue is a very different one. My hon. Friend the Member for West Lothian did put his finger on what is a very real difficulty when he referred to the loss of confidence among foreign buyers. There, I am bound to tell the House, he was on firmer ground, for I have got evidence that there is a feeling, whether it be justified or not, in the minds of some foreign
buyers that when the negotiations which are now proceeding have come to a successful conclusion, as I trust they will, it may be that they will not be able to get delivery if they place extra orders. Let the House bear that in mind in the discussion of this problem.
The hon. Member for Consett raised the very difficult question of evasions. I would point out to him that there is more than one way of looking at the problem of evasions. There are those who take the view that the way to deal with evasions is to scrap the whole Act. Others take the view that to stop evasions the thing to do is not to have fewer regulations but more regulations. The fact, alas, is a serious one, and the point put by the hon. Member for Bishop Auckland (Mr. Curry) is a serious one, too, because there can be no doubt whatever in the mind of anyone who has examined the question as to what is going on, and in a moment or two I will go so far as to give the House some instances of the methods which are adopted for evading the regulations of the Act. It is having a bad moral effect on the industry, and those responsible, the Central Council of Coal Owners or the Government—if the Government have to take action—may be led to draw very different conclusions from those drawn by people who say that what we have to do is to scrap the Act.
Let me for a minute or two deal with the problem of the foundation of the Act itself. The Act was passed for a very simple reason. I do not understand one or two of the complaints of the hon. Member for Aberdare (Mr. G. Hall) for if there are not representatives of the Miners' Federation on the board the responsibility does not lie here; it lies on the benches opposite. The Bill startled me when I saw it and for many reasons I was strongly against it in its passing. The title of the Bill said:
 An Act to provide for regulating and facilitating the production, supply and sale of coal by owners of coal mines; 
It is now too late for complaints to be made from the Opposition Benches that there is not a joint body of some kind to operate the Act. The hon. Member for Aberdare will know that it is a perfectly fair point that I am making. Responsibility is with the owners of coal, and there are often reminders of that.
The basis of the Coal Mines Act was a production from British mines of about 300,000,000 tons a year. At the moment there is an actual market of 209,000,000 tons a year. Up to the month of November, we feared that it would not actually reach 200,000,000 tons, but the last quarter brought the figure up to 209,000,000 tons. That is the reason why many who objected to some of the provisions of the Act do not find it possible to advocate the abolition of the Act, and do not join in the propaganda put out by some of the organisations that have been circularising hon. Members in the last two or three days.
In dealing with the Act this House has to topsider the industry as a whole—and I mean by that the miners who hew the coal and bring it to the surface, the owners who have to dispose of it and the sellers of it, either at home or abroad. More than that, the House has to bear in mind the interests of the community as a whole. I was taught when very young that when coal was sick, Britain was sick. I told some of my Danish friends the other day that when Britain is sick she does not eat bacon. Coal is sickening in this country and we cannot hope to get coal well again if we take our own point of view and try to attribute to certain things in the Act every ill that has come upon coal since the passing of the Act. It is grossly unfair to suggest that the drop in the export of coal has anything to do with the structure of Part I of the Act, excepting perhaps in a very minor degree. The hon. Member for Consett made it quite plain that he did not do that. I am now referring to certain propaganda that has gone very far and very fast in recent days. The charge that the Act is responsible for the reduction of coal exports is not only grossly unfair, but, to anybody who knows the Act, the charge is ridiculous.
What was the purpose of the Act? It was to meet a situation in which the industry does not respond to the ordinary economic test. The ordinary economic test is this: that if you produce coal, and if you can meet the demand of the consumers both in quality and in price, you can get any market in the world. Is there anybody, in this House or outside, who will contend that a mere price-cutting campaign in the export market
will win us back any proportion of what we have lost? The facts that have been brought forward to-night will prove the contrary. In the way he spoke of the restrictions in Germany, in France and in Belgium, I do not agree with the hon. Member for Aberdare. Hon. Members are just as unfair to the countries concerned when they say that those restrictions are due solely to tariff measures taken by this Government as are those who say that the drop in the export trade is due to the Act. I do not agree with that. I am not going to say that there may not be an element of truth in it, but I say that anyone who studies the structure of those countries will know that they are themselves coal-producing countries as well as coal-importing countries; and the real reason for the major part of these restrictions has nothing to do with the fiscal system of this country, though it may be that the fiscal system of this country will enable us in the course of our arguments to overcome that difficulty partially.

Sir HERBERT SAMUEL: It may not.

Mr. BROWN: We can only do as our mutual Leader used to say: we can only wait and see; and I should think that the right hon. Gentleman will be quite willing to do that, for I remember him standing in this House, not very far from where he is now, and asserting that, if we went in for a tariff, there would be a rise in the cost of living to the poorest of the poor. I think we can afford to wait and see; but I assert that, when you are dealing with restrictions in Germany, France, Belgium and Spain, you are not dealing with restrictions that have been mainly imposed for fiscal or any other reasons connected with the policy of this country. Those countries are themselves in possession of coal industries that are sick. They are coal-producing countries and they have their own difficulties. We have realised that fact, and for any person outside or inside this House to assert that merely destroying the regulations with regard to price in Part I of the Act of 1930 will win us back those markets is to assert what they will find it very difficult to prove.

Mr. REMER: I think that the hon. Gentleman will also find that there are subsidies in Poland.

Mr. BROWN: I am not unaware of that fact, but let me go a little further. Let me point out that the working experience of the Act has shown many things. It has shown, first of all, that it might have been good if more power had been given to the central board than was given in certain directions. I need not deal with the question of allocation except to quote one set of figures for the purpose of comparison. The allocations as regulated for the last two years have on the whole, with the exception of certain areas in. the last quarters of 1931 and 1932, been ample to meet the demand. There has been a margin, at the smallest, of 1,700,000 tons, and, at the largest, of 10,000,000 tons.
I now want to deal with the question of evasion, because this is one of the gravest issues that can be raised, and the one which, I am sure, is exercising the minds of all those concerned with the operation of the Act. Let me, without passing any comments, quote a series of the types of evasion which have come to our notice. These are examples of the evasions of the minimum price provisions that are operated in different districts. I will give the principal and most artful first. They are as follow:

1. The formation of subsidiary companies to which coal is sold at the statutory minimum price, the subsidiary companies in turn selling it at less than the minimum price, their losses being borne by the parent company.
2. Selling coal at prices below the minimum price ruling.
3. Selling more than one kind of coal at a time to one consumer, one kind at the minimum price and the other at a discount.
4. Selling a parcel of coal to a customer the greater part at the minimum price and the balance invoiced at a nominal price of a few pence per ton.
5. The payment of exorbitant remuneration to selling agents whose functions are purely nominal, to sell at prices below the minimum, making good their losses from their remuneration.
6. The purchase of stores from customers at inflated prices.
7. Coke is outside Part I of the 1930 Act.. Selling of coal and coke together,
502
the former at a minimum price, the latter at a substantial discount on the current market rate.

There are others. I have put these on record to show to hon. Members concerned that we are not without knowledge, and to show the hon. Member that we do not need an inquiry into the matter. The only inquiry I want to have is one in every ease where anyone makes an assertion about a lost order as to where, when and how that order was lost, and I should like to have that whenever the assertion is made, because it would be very helpful in any discussion that may be forthcoming about the defects which it has been admitted in all parts of the House that the Act has.

Mr. SLATER: Legislation would certainly be required to deal with those matters.

Mr. BROWN: The hon. Member wilt understand that I am not entitled, nor is anyone, to discuss legislation. That is why I put my speech in the form that I put it. Let me tell the hon. Member precisely what we have done. We have consulted all sections of the coal trade. The Mining Association informed the Government that the majority of the coalowners are in favour of the continuance of Part I and that a sub-committee has under consideration those amendments to the scheme which can be effected without fresh legislation which will secure general agreement among the coalowners to the continuance of Part I.

Sir H. SAMUEL: If my hon. Friend is passing away from evasions, can he tell us whether any of those evasions are legal?

Mr. BROWN: Some of them are evasions of the letter and some of the spirit, but it is not as easy under the structure of the Act to stop even illegal evasions as it would appear. It is one of the problems that are now exercising the minds of the Central Council. Let me make the point about the inquiry. The Miners' Federation unanimously recommended that Part I, amended and strengthened in certain directions, should continue. The Coal Merchants' Federation said it would view with regret a decision to allow the Act to lapse. The Coal Exporters' Federation urged that coal for export and bunkers should be free from the operation of the quota and
minimum prices. Another body representing wholesale coal merchants recommend that Part I should lapse in December 1, 1932. We have done our best to make inquiries and, more than that, the Central Council has been busily engaged discussing this issue. I think, therefore, there is no need whatever for a new inquiry in the matter.
I should like to say a word or two further about the export trade. As distinct from wild statements made in some propaganda, the Chamber of Shipping have put their view in a very moderate way. They say they are of opinion that the quota and minimum price restrictions of the Coal Mines Act had tended to hamper the export of coal and had contributed to the grave loss of employment in the coal and shipping industries. We have had a lot of figures about exports. It is true that we have lost 4,500,000 tons in 1932 as compared with 1931, but there is another remarkable fact. While in the markets to which the hon. Member referred, the coal-producing coal-consuming markets, we have losses, 1932 saw a gain in quite a number of our other markets. That is a point which, I think, the House should take into account in discussing this matter. For instance, Denmark increased her demand last year over 1931 by 505,000 tons. There were increases from Sweden, Norway, Finland, Latvia and Lithuania—none of them large, but all of them showing the new tendency in the North-West European market, and a very remarkable one.

Mr. D. GRAHAM: And from Russia?

Mr. BROWN: Not from Russia. Russia is one of our competitors in some of the markets in the Mediterranean, and a very serious competitor. That is the answer to some of those who say that by mere price cutting you can get markets all over the world. I think this point is one of instruction, and throws a ray of light on what can be done under the present regulations. There is a small increase in certain South American countries—in Brazil, for instance, and in Cuba. There is a very remarkable increase in Canada of 760,000 tons. The year 1932 is the largest year we have ever had in exports to Canada—1,671,000 tons. When we add these together we find that while
there is a loss in the markets to which the hon. Member for Aberdare referred, there is a gain of 2,579,000 tons in these other markets in 1932 over 1931. I am entitled to point out to the right hon. Member for Darwen (Sir H. Samuel) at any rate, that while there has been no agreement in the matter, and it is much too early for me to discuss the details while our customers are still in this country and we are still talking, it is quite obvious that there is a new mind in North Western Europe, and we are getting some fruit from the discussion.
Let me say a word or two on another point before I sit down. It is obvious than hon. Members in all parts of the House are uneasy lest anything should be done to hinder the export of coal. The Central Council of Coalowners have been working since the summer on Amendments to schemes which it is expected will remove, or at least reduce, some of the difficulties which schemes of regulation involve. They have not yet reached conclusions which they can place before the Government, but I wish to emphasise the point made in June by the President of the Board of Trade and my predecessor, that the administration of the schemes must be put right. That has been, in fact, the condition of the continuance of the scheme for five years. In regard to tariff negotiations with foreign countries, assurances have already been given that if there is agreement to take additional quantities of British coal, the necessary supply will be available. If those negotiations result in increased trade for British coal, I think the whole House will agree with me that it is unthinkable that the trade should be hindered through want of flexibility in the machinery of the Act. May I point out, as I did in the course of the short speech I made on the Adjournment in December, that district schemes now have the power to separate inland from export coal as a class of coal. That is now part of the machinery of the Act, and they can do it if they wish.
I would point out that one of the difficulties is that some of those who are most clamant for the removal of the restrictions on the allocation for export are just those who would most violently oppose it if it were done. The real trouble is that the knot is tied when those who have allocations for export desire to use them coastwise in the in-
laud market. That is the crux of the whole problem. That is why it is not as easy to solve the problem as some of our hon. Friends would suggest. It is not because it is not in the power of a district to do it, but for reasons best known to themselves and to those who have studied the structure of the Act, owners in every district have decided not to use that particular machinery.
Lancashire may have bought Scottish coal. The illustration of coal being brought from Ayrshire to Liverpool is a perfect illustration of one of the reasons why it is difficult at times to get an extra allocation for certain districts. It is very difficult to expect the representative of the inland district to vote excess allocation if he thinks that it is not to be used to send abroad, but used in competition with him in his own market at a price which may be—as I believe in this case is the fact—below the local minimum price. If you put powers into the hands of the Council to make separate allocations for inland and export coal it would then be possible to ensure that the requisite amount of coal for export could be available. I hope that the coalowners will come to an early decision on this matter. I can assure the hon. Member interested in this particular side of the subject and the House that unless the Central Council reaches a conclusion in the near future as to steps to be taken to ensure that coal for export is available, it will then be of course a question for the decision of the Government as to whether they will themselves take action in that matter.

Mr. MARTIN: How long is "the near future"?

Mr. BROWN: Shorter than six months, which I think the hon. Member regards as a reasonable period. In view of what is happening, I should think six months too long. With regard to the Motion and the Amendment on the Order Paper, the House will see from what I have said that I am in sympathy with elements in all of them, but I cannot accept any of them on behalf of the Government. I would, therefore, suggest as the wisest thing after this interesting and very valuable Debate, in which I regret that so many of the Members who wished to speak have been unable to take part, either the Motion should be withdrawn or we should exer-
cise the two minutes left for another Member to see his way to talk out the Motion.

10.58 p.m.

Mr. MILNE: I venture to intervene in the Debate because I represent the mining constituency of West Fife which is the centre of all the trouble and has suffered more than any other district. I think I heard an hon. Member ask, "Where is West Fife?" I can tell him. West Fife is the principal exporting county in Scotland. There are collieries there mainly concerned with the export trade. They are the best equipped in the country, and the management is second to none. In spite of the facts to which I have referred, at the end of the year hundreds of men were thrown idle, not through lack of work, but as a result of the operation of an Act of Parliament. I address the House upon a mining topic with very real diffidence, because I feel that I am addressing Members, many of whom are equipped with a knowledge which I do not possess, but which I envy and respect. On the other hand, I have the advantage that I am entirely free from any prepossessions. When I entered Parliament I found the Coal Mines Act upon the Statute Book and I regard it neither with favour nor ill-will. Amidst all the welter—

It being Eleven of the Clock, the Debate stood adjourned.

The Orders of the Day were read, and postponed.

IMPORT DUTIES ACT.

Motion made, and Question proposed, "That this House do now adjourn."—[Sir F. Thomson.]

11.2 p.m.

Sir B. PETO: I put a question to-day to the President of the Board of Trade, on which I wish to say a few words. It will be for the convenience of hon. Members if I first read the question, and the answer I received, which made me give notice that I would raise the matter on the Adjournment. I asked the President of the Board of Trade:
 whether he can give any date by which an order may be expected, in accordance
with the recommendations of the Import Duties Advisory Committee, on the application of the fabric glove industry; whether the commercial negotiations with foreign countries, which are delaying the decision, relate to the glove industry or other industries; and whether, in view of the depression in the fabric glove industry in this country, due to the dumping of surplus foreign produce at prices below cost of production, he will arrive at a decision at the earlist possible moment.
The reply that I received was as follows:
 I cannot give a date by which a decision will be reached on the Committee's recommendations, but the hon. Member may rest assured that there will be no unnecessary delay. As regards the second part of the question, it would not be expedient to make detailed announcements as to the scope of negotiations which are in progress.
I do not desire, indeed it would be out of order, to go into any question as to why the Import Duties Advisory Committee have made a recommendation to the Treasury, or the nature of that recommendation or the evidence that produced that recommendation. What I am concerned with is the position of this House in relation to this new method of procedure in dealing with tariff questions. The only information that has been vouchsafed was a communique which appeared in the Press, in a few lines, on the 23rd February. I will read it. I am quoting from the "Times." It is headed:

DECISIONS DELAYED.

" The Treasury state that they have also received from the Import Duties Advisory Committee recommendations relating to Customs duties on the following commodities:

Yeast,
Pottery and clay products,
Baskets,
Fabric Gloves,

but that in the present stage of the commercial negotiations and discussions which are in progress with various foreign countries they have deferred a decision whether or not to make Orders in pursuance of these recommendations."

It is necessary for my purpose to show that this question of duties upon fabric gloves is not a question of a new duty. There has been a history of duties in relation to that particular industry. They have had varying duties, sometimes on and sometimes off, for 15 years. In 1918 they came under the Safeguarding Duties Act, which operated against imports from enemy countries, mostly imports from
Germany, as these imports practically are all made in Saxony. There has been more general legislation since. There was a duty of 33½ per cent. for five years, but when the Labour Government came into office for the first time, that duty was allowed to lapse in 1923. It was reimposed two years later, in 1925, and continued for a further five years when it lapsed again under the Labour Government in 1930. Then we come to the present Government. They began with no duty at all. Just before Christmas 1931 we had the Abnormal Importation Duties Act, which imposed a duty of 50 per cent. In April that was changed to a duty of 20 per cent. There have been several applications since. We now learn that a recommendation has been made, and obviously it must be for an increase in the duty. I want to point out in the first place that this is no new duty. The industry has had a duty and has been without a duty, and under the present Government there has been a Duty of 50 per cent., and one of 20 per cent. Therefore I ask hon. Members to consider the position of this House in regard to the Import Duties Advisory Committee and the Government. The Committee is inacessible to hon. Members. When we go to the Department we are told that the duty of the Advisory Committee is to advise the Government, and that no Government Department exercises any control over them. Now we know that when they come to a decision it may be delayed for weeks and months while negotiations go on with foreign countries dealing perhaps with industries which had no relation whatever to the industry which has been the subject of the recommendation.

I want to know when this recommendation was made. Was it this year; since Christmas? I was under the impression the other day that the Board of Trade were waiting for the recommendation of the Advisory Committee. I want to know why workpeople should be thrown out of work, as in this case, and why this industry should be sacrificed in the supposed interests of other work-people? Is it a question of the greatest goods to the greatest number. The fabric glove industry is practically destroyed in this country. Only one or two little factories are operating at all, and only a minute fraction of those employed a few years ago are now in employment.

It is only in one special line, fabric gloves made from artificial silk that any business at all is done. This industry had protection under the Abnormal Importation Duties Act, because there was an abnormal flood of dumped goods into this country. The position in January was worse than it was 12 or 13 months ago. In January, 107,000 dozen fabric gloves were imported from abroad, and in one case an order has been placed by a firm of wholesale glove buyers in London for the purchase of 24,000 dozen simplex cotton gloves in a single line which had been bought by a firm in America. They were sent to this country because there was no demand for them in New York, and were sold at 7s. 6d. per dozen pairs, which is about half the price of the cost of production in Saxony and about one-third of what they would cost to produce in this country.

There is every evidence therefore, that as far as the abnormal importation of dumped goods is concerned, the position is worse now than when there was a 50 per cent. duty. The condition of the industry is deplorable. The industry is practically wiped out. There were considerations that related to Lancashire yarn. Now, far from Lancashire yarn being used in the production of these Saxony fabric gloves, the yarn that is being used in Germany is almost exclusively German-spun cotton yarn, which is very much cheaper than anything which could be imported from Lancashire.

I want to know when this recommendation was made, and with what country these negotiations are taking place. If the Minister cannot tell us that, let him tell us whether the negotiations relate to any industry connected with glove-making. The industry in this country lately employed 1,000 hands, at another time 2,000 hands, and if we made here all the fabric gloves that we use it would employ 6,000 hands. Is the Minister sure that in keeping us waiting until the industry is finally destroyed, for some hypothetical advantage we shall get for some other industry, he is not grasping at the shadow and dropping the bone?

11.12 p.m.

Mr. HALES: I want to put before the House the very desperate condition of the pottery industry of North Stafford
shire. To a large extent the pottery industry is affected similarly to the glove industry, inasmuch as the Abnormal Import Duties Act resulted in a duty of 50 per cent. From that moment a new era of prosperity dawned on the district. Factories were employed on full time, more hands were engaged and machinery was ordered for the increase of business which rapidly came in. Then, to the consternation of the district, the Advisory Committee was appointed. It adopted a course which to every business mind seemed amazing. Instead of allowing the existing duties to remain until they had had an opportunity of going into matters in detail, and seeing whether the duties were ample or insufficient, they adopted the course of making a 20 per cent. datum line, raising the duty by 10 per cent. up to 20 per cent., and reducing the 50 per cent. to that 20 per cent. level.
The results were disastrous. Immediately the new duties came into force many orders from the Continent and home buyers were cancelled, and to-day in Staffordshire you can see thousands and thousands of tea sets lying unsaleable in the warehouses.
I am very pleased indeed to find that there is some possibility of the duties being enhanced. After 10 months of weary waiting, during which time the whole district has been on tenter hooks, not knowing what was to happen, we find that after a recommendation has been made which means the enhancement of the existing duties, we are told that for some mysterious reason of international bargaining the duties are not to be divulged, and we are still in uncertainty. I demand on behalf of the potters and manufacturers in North Staffordshire that we should not be victimised, that this industry should not be made a counter in some bargaining business abroad and brought to the verge of ruin. The situation is desperate, and I hope that the Government will see the importance, at this time, when everybody is asking for more employment, of not taking away the livelihood of these people, who have been waiting for 10 long months for the restoration of their prosperity. I hope the Government will at once carry out what the committee have advised.

11.16 p.m.

Mr. HOLDSWORTH: To those of us who never believed in tariffs as a bargaining power, some of the statements made during the last two or three weeks by different Ministers have been very interesting. Only a week ago, the Chancellor of the Exchequer referred to the use of tariffs as a bargaining weapon. This afternoon, the Lord President of the Council made the point that, if the world was to recover, there must be a lowering of tariff barriers. The Prime Minister last week said that at the World Economic Conference the opportunity would be taken of pressing home the necessity for lowering tariff barriers, and that our tariff would be used to that end. Members of the Conservative party have told us repeatedly that the purpose of placing tariffs on the Statute Book was that they should be used to bring in Free Trade throughout the world. We desire to impress that point of view on the Minister to-night. All these questions that are being raised show how little sincerity there is in many of the statements about the use of tariffs as a bargaining weapon. But I assure the Minister that so long as tariffs are used, in order to restore world trade, we shall give them every support in our power. We would like the Minister to-night to reassure us that the statements of the Prime Minister, the Chancellor of the Exchequer and the Lord President of the Council can be accepted as positive proof of the intention of the Government to use tariffs and promote freedom of trade among all the nations of the world.

11.19 p.m.

Sir FRANK SANDERSON: It was not my intention to take part in this Debate but the point raised by the hon. Member for Barnstaple (Sir B. Peto) is so important that I would like to mention the case of the duty upon linseed in this connection. A few weeks ago I raised the question of the import duty upon linseed and the seriousness of its effects. I pointed out that the result would be that we should be inundated with linseed oil from abroad and what I then intimated has proved correct. During December and January no less than 5,000 tons of linseed oil—

Sir B. PETO: May I make an appeal to my hon. Friend? The point that I
raised has nothing to do with the question of linseed oil and it is unfair when a question has been raised on the Adjournment that the Minister should not be given time to reply.

Sir F. SANDERSON: I was under the impression that my hon. Friend's point was in regard to delay both by the Treasury and by the Advisory Committee in coming to a decision in regard to import duties. If I am wrong, I will give way.

11.20 p.m.

Lieut.-Colonel COLVILLE (Secretary, Overseas Trade Department): I am glad the hon. Baronet the Member for Barnstaple (Sir B. Peto) has raised this question, because it gives me an apportunity of dealing with a point of importance, which refers not only to fabric gloves, but to the general position of industry in this country, in relation to reports from the Import Duties Advisory Committee and commercial negotiations. The word "hypothetical" has been used tonight, but I can assure hon. Members that there is no question of jeopardising industries in this country in order to obtain hypothetical benefits. It is recognised that we are in this country, and have been for many years, the greatest individual market in the world for foreign goods, and that we are entitled to use our bargaining power, and the argument it has given us, in our discussions with other nations; in other words, that the British tariff is not only for the purpose of giving stability and strength to our industries internally, but that we should be neglecting our duty if we did not make use of it also, as far as we can, in order to obtain better opportunities for the United Kingdom export trade.
The position is that the Import Duties Advisory Committee make reports based upon their views as to the need of industries in this country for Protection, in order to enable them to compete in the home market. That is the function of the Advisory Committee, which they carry out independently, as hon. Members know, and they make their report. It is not their function to consider the repercussions which their recommendations may have on negotiations which may be in progress, or immediately pending, with foreign countries, but His Majesty's Govern-
ment must clearly retain the right to take into account these wider questions when they decide whether or not to publish or to put into force the recommendations of the Advisory Committee. Let me explain the reason for that. Publication of a negative report, a report saying there was to be a decrease of duty, at a particular juncture might very well weaken our hands in negotiation, while equally action on a positive report, to increase a duty, at a particular juncture might have an effect on current negotiations which would damage British trade generally out of all proportion to the value of the duty to the particular trade concerned. That is a consideration which His Majesty's Government must have before them in dealing with the question.
My hon. Friend raised, very properly, the point, Who takes this responsibility, when the Import. Duties Advisory Committee have made their report to the Treasury, of that report not being immediately acted upon? I answer that by saying that the Government take that responsibility. They must do so, and they must do it with the knowledge, which only they have, of the reactions which this would have on trade as a whole. Therefore, we do not in any way seek to shirk the responsibility of delaying, in a particular case, the action recommended by the Committee, or of delaying publication of their report. I was asked the specific question, which I think I can answer, in relation to fabric gloves, When did the Treasury receive the report from the Advisory Committee? I find that in that case the report was received on 26th January. It was published in the Press later after consideration by the Government, and there was a delay.

Mr. HALES: Can the hon. and gallant Gentleman say anything about pottery?

Lieut.-Colonel COLVILLE: I cannot answer that without notice. In the case of fabric gloves I ascertained the position because it was on that particular matter that the hon. Baronet gave notice. It is obvious it is not possible to debate in the House the reasons which may have been in the minds of the Government in taking a decision on any particular kind of goods, for these reasons. Hon. Members who have been engaged in any
negotiations of any kind will realise that to disclose information might very well be an embarrassment to them, and, of course, anything that I shall say to-night would have very wide publicity. Therefore I will ask my hon. Friend not to press his point as to the particular countries to which this bas relation. The trades which he and the hon. Member for Hanley (Mr. Hales) have raised are very closely before the Government. In determining what action they will take, they are having full regard to the variations in duty in those trades. My hon. Friend the Member for Barnstaple has outlined, in the case of fabric gloves, the ups and downs of the movements in regard to duties over a long period of years, but we are well aware of that, and we have fully in mind the desire of the fabric glove industry to know what future is in front of them. I can assure the hon. Baronet that we have that fully in mind. I would also add that I hope that an early decision will be possible on this matter.
My hon. Friend the Member for Hanley also raised the question, in relation to pottery, of the variation of duty. I would make it plain that the abnormal import duties which were applied at the rate of 50 per cent. were for a specific purpose. They were applied to prevent forestalling while the tariff was being more carefully developed. Therefore, it was made plain at the time that it was not intended that it should be a continuing rate of duty, and the machinery which was set up in the form of the Import Duties Advisory Committee was for the purpose—and I think hon. Members will agree that it was wisely set up—of having an independent committee to examine all the aspects of the questions put in front of them. At this stage I can say no more except to assure the House of two things. One is that there will be no question of jeopardising British industries for the sake of hypothetical advantages. We shall make certain in any negotiations in which we are engaged that there must be real and definite advantages before any concessions can be given. But we shall also have in mind the value of the industries spoken of to-night from the point of view of employment. Lastly, I would like to say that from the time the Import Duties Advisory Committee makes its report His Majesty's Govern-
ment assumes full responsibility for action in regard to that report, both as to publication or the Order which is made as regards increase of duties.

Sir B. PETO: May I know whether these negotiations relate to industries which have any connection with the fabric glove industry or are totally different industries?

Lieut.-Colonel COLVILLE: I have answered that in a phrase which quite purposely was a little vague and that was "the repercussions of the result of action on the recommendation." I ask
my hon. Friend not to press me beyond that point. There are negotiations going on over a fairly wide range of goods, and the repercussions spoken of may not be taken to mean that a particular industry is being negotiated with, but it may be that the country with which we are dealing has a special interest in a trade, and that repercussions would have an effect. I hope my hon. Friend will not press me further.

Adjourned accordingly at Twenty-nine Minutes after Eleven o'Clock.